FIRSTMERIT CORP /OH/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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EX-99.2 - EXHIBIT 99.2 - FIRSTMERIT CORP /OH/	a2q12epsslidedeckjuly24f.htm
8-K - 8-K - FIRSTMERIT CORP /OH/	fmer-8kq22012.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 Reports Second Quarter 2012 EPS of $0.28 Per Share

Quarterly Highlights include:


•	Consistent profits: 53rd consecutive quarter of profitability


•	Robust organic growth: Average commercial loan growth of $131.3 million, or 2.55%, from prior quarter; average core deposit growth of $159.2 million, or 1.63%, from prior quarter


•	Superior credit quality: Nonperforming assets as a percent of period end loans declined 10.14% from 0.87% to 0.76%; net charge-offs to average loans, excluding acquired loans, decreased to 0.45% from 0.63% in the prior quarter.


•	Solid balance sheet: Strong tangible common equity ratio at 8.01%

Akron, Ohio (July 24, 2012) - FirstMerit Corporation (Nasdaq: FMER) reported second quarter 2012 net income of $30.6 million, or $0.28 per diluted share. This compares with $30.3 million, or $0.28 per diluted share, for the first quarter 2012 and $29.8 million, or $0.27 per diluted share, for the second quarter 2011.

Returns on average common equity (“ROE”) and average assets (“ROA”) for the second quarter 2012 were 7.69% and 0.84%, respectively, compared with 7.72% and 0.84%, respectively, for the first quarter 2012 and 7.78% and 0.82% for the second quarter 2011.

“Our solid performance in the second quarter reflects the Corporation's strength in the face of a persistently lagging economy, a low interest rate environment and additional costs of complying with federal legislation affecting the banking industry,” said Paul G. Greig, chairman, president and CEO of FirstMerit Corporation. “Despite these challenges, we have continued to grow organically, focus on our operating efficiencies and lower our funding costs. These accomplishments position us to increase our value to customers and shareholders.”

FirstMerit Corporation Reports Second Quarter 2012 EPS Results

Net interest margin was 3.77% for the second quarter of 2012 compared with 3.78% for the first quarter of 2012 and 3.77% for the second quarter of 2011. The net interest margin compressed one basis point compared with first quarter of 2012 with earning asset yields declining three basis points offset by two basis points of improved funding costs. The decline in funding costs in the quarter resulted from the Corporation’s continued execution on its strategy of core deposit growth through new customer acquisition and transitioning certificates of deposit customers into lower cost deposits. The net interest margin was unchanged from the second quarter of 2011.

Average loans, not including covered loans, during the second quarter of 2012 increased $159.7 million, or 2.05%, compared with the first quarter of 2012 and increased $668.1 million, or 9.19%, compared with the second quarter of 2011. Average commercial loans, excluding covered loans, increased $131.3 million, or 2.55%, compared with the prior quarter, and increased $608.8 million, or 13.05%, compared with the year ago quarter. While commercial loans were the primary driver of overall average loan growth, the Corporation has experienced increased average consumer loans for four consecutive quarters.

Average deposits were $11.6 billion during the second quarter of 2012, an increase of $83.3 million, or 0.73%, compared with the first quarter of 2012, and an increase of $90.5 million, or 0.79%, compared with the second quarter of 2011. During the second quarter 2012, average core deposits, which exclude time deposits, increased $159.2 million, or 1.63%, compared with the first quarter 2012 and increased $835.4 million, or 9.18%, compared with the second quarter 2011. Average time deposits decreased $75.9 million, or 4.48%, and decreased $744.8 million, or 31.52%, respectively, over prior and year-ago quarters. The Corporation continues to emphasize growth in lower cost core deposit products and decrease its reliance on certificates of deposit accounts to support balance sheet growth. For the second quarter of 2012, average core deposits accounted for 85.99% of total average deposits, compared with 85.23% for the first quarter of 2012 and 79.39% for the second quarter of 2011.

Average investments increased $7.1 million, or 0.19%, compared with the first quarter of 2012 and increased $75.2 million, or 2.07% compared with the second quarter of 2011.

Net interest income on a fully tax-equivalent (“FTE”) basis was $121.7 million in the second quarter 2012 compared with $121.4 million in the first quarter of 2012 and $119.7 million in the second quarter of 2011.

During the quarter ended June 30, 2012, management announced its implementation plan to enhance the operating efficiency and profitability of the Corporation (the "Efficiency Initiative") and as a result recognized $8.9 million in one-time charges primarily consisting of employee separation costs and professional services fees. The Efficiency Initiative is a long-term plan to optimize service channels and lower the overall cost structure. It includes the elimination of assistant branch manager positions and closing of eight full service branches. All branch closures are expected to occur in the quarter ended September 30, 2012.

Noninterest income, excluding gains on securities transactions of $0.5 million, for the second quarter of 2012 was $54.8 million, an increase of $3.3 million, or 6.39%, from the first quarter of 2012 and an increase of $4.2 million, or 8.20%, from the second quarter of 2011. Loan sales and servicing income decreased $1.6 million from the first quarter of 2012, which included a change in the valuation of mortgage servicing rights of $2.6 million, and increased $2.2 million from the second quarter of 2011. Other operating income in the second quarter of 2012 increased $3.5 million compared with the prior quarter and increased $4.4 million compared with the prior year quarter. Other operating income in the

FirstMerit Corporation Reports Second Quarter 2012 EPS Results

second quarter of 2012 included $2.6 million in gains on covered loans paid in full.

Other income, net of $0.5 million in securities gains, as a percentage of net revenue for the second quarter of 2012 was 31.03% compared with 29.77% for first quarter of 2012 and 29.71% for the second quarter of 2011. Net revenue is defined as net interest income, on an FTE basis, plus other income, less gains from securities sales.

Noninterest expense for the second quarter of 2012 was $119.1 million, an increase of $5.3 million, or 4.67%, from the first quarter of 2012 and an increase of $9.0 million, or 8.18%, from the second quarter of 2011. Excluding the $8.9 million in one-time charges from implementation of the Efficiency Initiative in the second quarter of 2012, the Corporation has displayed significant progress in reducing operating expenses in response to the challenging industry environment. Of the total one-time charges, $3.3 million was related to employee separation costs and $5.2 million was related to professional services fees.

During the second quarter of 2012, the Corporation reported an efficiency ratio of 67.21%, compared with 65.52% for the first quarter of 2012 and 64.30% for the second quarter of 2011. Excluding the $8.9 million in one-time charges related to the Efficiency Initiative, the reported efficiency ratio for the second quarter of 2012 would be 62.15%.

Net charge-offs, excluding covered loans, totaled $8.8 million, or 0.45% of average loans, excluding acquired loans, in the second quarter of 2012, compared with $12.0 million, or 0.63% of average loans, in the first quarter 2012 and $15.6 million, or 0.89% of average loans, in the second quarter of 2011.

Nonperforming assets totaled $61.1 million at June 30, 2012, a decrease of $6.9 million, or 10.14%, compared with March 31, 2012 and a decrease of $38.8 million, or 38.83%, compared with June 30, 2011. Nonperforming assets at June 30, 2012 represented 0.76% of period-end loans plus other real estate compared with 0.87% at March 31, 2012 and 1.38% at June 30, 2011.

The allowance for noncovered loan losses totaled $103.8 million at June 30, 2012. At June 30, 2012, the allowance for noncovered loan losses was 1.29% of period-end loans compared with 1.34% at March 31, 2012 and 1.51% at June 30, 2011. The allowance for credit losses is the sum of the allowance for noncovered loan losses and the reserve for unfunded lending commitments. For comparative purposes the allowance for credit losses was 1.36% of period end loans, excluding acquired loans, at June 30, 2012, compared with 1.41% at March 31, 2012 and 1.59% at June 30, 2011. The allowance for credit losses to nonperforming loans was 234.57% at June 30, 2012, compared with 204.98% at March 31, 2012 and 158.30% at June 30, 2011.

The Corporation's total assets at June 30, 2012 were $14.6 billion, a decrease of $49.5 million, or 0.34%, compared with March 31, 2012 and an increase of $273.8 million, or 1.91%, compared with June 30, 2011.

Total deposits were $11.6 billion at June 30, 2012, a decrease of $32.3 million, or 0.28%, from March 31, 2012 and an increase of $274.9 million, or 2.42%, from June 30, 2011. Core deposits totaled $10.0 billion at June 30, 2012, an increase of $39.0 million, or 0.39% from March 31, 2012 and an increase of $945.2 million, or 10.40%, from June 30, 2011.

Shareholders' equity was $1.6 billion at June 30, 2012, compared with $1.6 billion at March 31,

FirstMerit Corporation Reports Second Quarter 2012 EPS Results

2012, and $1.6 billion at June 30, 2011. The Corporation maintained a strong capital position as tangible common equity to assets was 8.01% at June 30, 2012, compared with 7.86% at March 31, 2012 and 7.79% at June 30, 2011. The common cash dividend per share paid in the second quarter 2012 was $0.16.

Second Quarter 2012 Conference Call

FirstMerit (Nasdaq: FMER) senior management will host an earnings conference call today at 11:00 a.m. (Eastern Time) to provide an overview of second 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: 99505861. A replay of the conference call will be available at approximately 2:00 p.m. (Eastern Time) on July 24, 2012 through August 7, 2012 by dialing (855) 859-2056, and entering the PIN: 99505861. The Corporation will provide a slide presentation, which management will speak to during the conference call. A copy of the presentation will be available prior to the earnings conference call at https://www.firstmerit.com/personal/investors.aspx; click on the Presentations link to access the slide presentation.

About FirstMerit Corporation

FirstMerit Corporation is a diversified financial services company headquartered in Akron, Ohio, with assets of $14.6 billion as of June 30, 2012 and 205 banking offices and 213 ATM locations in Ohio, Western Pennsylvania, and Chicago, Illinois areas. FirstMerit provides a complete range of banking and other financial services to consumers and businesses through its core operations. Principal affiliates include: FirstMerit Bank, N.A., FirstMerit Mortgage Corporation, FirstMerit Title Agency, Ltd. and FirstMerit Community Development Corporation.

Subsequent Events

The Corporation is required under generally accepted accounting principles to evaluate subsequent events through the filing of its consolidated financial statements for the quarter ended June 30, 2012 on Form 10-Q. As a result, the Corporation will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of June 30, 2012 and will adjust amounts preliminarily reported, if necessary.

Forward-Looking Statements

This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Corporation, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, continued softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Corporation's business, success of the Corporation's efforts to reduce operating expenses, competitive pressures, changes in accounting, tax or regulatory practices or requirements and those risk factors detailed in the Corporation's periodic reports and registration statements filed with the Securities and Exchange Commission. The Corporation undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.

FirstMerit Corporation Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBSIDIARIES
Consolidated Financial Highlights
(Unaudited)							Quarters
(Dollars in thousands)	2012			2012			2011			2011			2011
	2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr
EARNINGS
Net interest income FTE (a)	$	121,689		$	121,428		$	123,598		$	121,788		$	119,735
Provision for noncovered loan losses	8,766			8,129			12,275			14,604			10,138
Provision for covered loan losses	3,430			5,932			2,773			4,768			7,481
Other income	55,301			51,726			59,737			60,772			51,491
Other expenses	119,077			113,768			123,874			115,957			110,068
FTE adjustment (a)	2,766			2,641			2,632			2,396			2,292
Net income	30,585			30,344			30,496			31,737			29,763
Diluted EPS	0.28			0.28			0.28			0.29			0.27
PERFORMANCE RATIOS
Return on average assets (ROA)	0.84		%	0.84		%	0.83		%	0.86		%	0.82		%
Return on average common equity (ROE)	7.69		%	7.72		%	7.70		%	8.02		%	7.78		%
Net interest margin FTE (a)	3.77		%	3.78		%	3.85		%	3.75		%	3.77		%
Efficiency ratio	67.21		%	65.52		%	69.46		%	64.78		%	64.30		%
Number of full-time equivalent employees	2,789			2,997			3,018			3,016			3,028
MARKET DATA
Book value/common share	$	14.60		$	14.51		$	14.33		$	14.38		$	14.19
Period-end common share mkt value	16.51			16.86			15.13			11.36			16.51
Market as a % of book	113		%	116		%	106		%	79		%	116		%
Cash dividends/common share	$	0.16		$	0.16		$	0.16		$	0.16		$	0.16
Common stock dividend payout ratio	57.14		%	57.14		%	57.14		%	55.17		%	59.26		%
Average basic common shares	109,562			109,211			109,249			109,245			109,138
Average diluted common shares	109,562			109,211			109,249			109,246			109,139
Period end common shares	109,641			109,187			109,251			109,247			109,241
Common shares repurchased	111			69			7			10			45
Common stock market capitalization	$	1,810,173		$	1,840,893		$	1,652,968		$	1,241,046		$	1,803,569
ASSET QUALITY (excluding acquired loans)
Gross charge-offs	$	15,014		$	17,417		$	18,984		$	20,014		$	20,958
Net charge-offs	8,766			11,979			13,763			14,604			15,641
Allowance for noncovered loan losses	103,849			103,849			107,699			109,187			109,187
Reserve for unfunded lending commitments	5,666			5,410			6,373			6,360			5,799
Nonperforming assets (NPAs) (b)	61,080			67,971			81,094			90,375			99,846
Net charge-offs/average loans ratio (b)	0.45		%	0.63		%	0.73		%	0.79		%	0.89		%
Allowance for noncovered loan losses/period-end loans (b)	1.29		%	1.34		%	1.41		%	1.46		%	1.51		%
Allowance for credit losses/period-end loans (b)	1.36		%	1.41		%	1.49		%	1.55		%	1.59		%
NPAs/loans and other real estate (b)	0.76		%	0.87		%	1.06		%	1.21		%	1.38		%
Allowance for noncovered loan losses/nonperforming loans	222.44		%	194.83		%	166.64		%	160.09		%	150.31		%
Allowance for credit losses/nonperforming loans	234.57		%	204.98		%	176.50		%	169.42		%	158.30		%
CAPITAL & LIQUIDITY
Period-end tangible common equity to assets	8.01		%	7.86		%	7.86		%	7.75		%	7.79		%
Average equity to assets	10.98		%	10.91		%	10.75		%	10.75		%	10.59		%
Average equity to total loans (c)	17.57		%	17.50		%	17.40		%	17.55		%	17.36		%
Average total loans to deposits (c)	78.78		%	78.74		%	79.12		%	78.18		%	77.05		%
AVERAGE BALANCES
Assets	$	14,558,514		$	14,496,937		$	14,623,441		$	14,610,628		$	14,481,208
Deposits	11,555,283			11,472,021			11,416,546			11,447,682			11,464,738
Loans, excluding acquired loans (c)	7,857,840			7,677,963			7,520,400			7,298,446			7,080,109
Acquired loans, including covered loans (c)	1,245,246			1,355,086			1,512,123			1,651,559			1,753,943
Earning assets	12,986,988			12,935,184			12,747,868			12,878,105			12,724,269
Shareholders' equity	1,599,187			1,581,009			1,572,061			1,570,411			1,533,855
ENDING BALANCES
Assets	$	14,621,344		$	14,670,818		$	14,441,702		$	14,688,278		$	14,347,557
Deposits	11,615,841			11,648,165			11,431,609			11,396,121			11,340,939
Loans, excluding acquired loans (c)	8,031,998			7,764,058			7,635,776			7,453,613			7,216,015
Acquired loans, including covered loans (c)	1,187,203			1,306,165			1,404,644			1,604,706			1,707,887
Goodwill	460,044			460,044			460,044			460,044			460,044
Intangible assets	7,274			7,756			8,239			8,782			9,325
Earning assets	13,212,071			13,318,202			13,011,267			12,885,242			12,958,324
Total shareholders' equity	1,600,815			1,584,105			1,565,953			1,570,654			1,550,387
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) - Acquired loans and other real estate from First Bank, George Washington Savings Bank and Midwest Bank & Trust Company are excluded from the ratio of our allowance for loan and credit losses and NPAs.

(c) - Excludes loss share receivable of $152.6 million, $171.1 million, $205.7 million, $220.5 million and $239.4 million as of June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011, respectively.

FirstMerit Corporation Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets

(Dollars in thousands)				June 30,			December 31,			June 30,
(Unaudited, except December 31, 2011, which is derived from the audited financial statements)				2012			2011			2011
ASSETS
	Cash and due from banks			$	226,026		$	219,256		$	191,965
	Interest-bearing deposits in banks			111,909			158,063			32,113
		Total cash and cash equivalents		337,935			377,319			224,078
	Investment securities
		Held-to-maturity		352,221			82,764			80,857
		Available-for-sale		3,216,365			3,353,553			3,498,272
		Other investments		140,742			140,726			160,805
	Loans held for sale			19,018			30,077			22,951
	Noncovered loans:
		Commercial		5,404,971			5,107,747			4,808,305
		Residential mortgage		438,147			413,664			400,661
		Installment		1,262,877			1,263,665			1,259,072
		Home equity		766,840			743,982			738,719
		Credit cards		142,586			146,356			143,828
		Leases		84,507			73,530			57,634
			Total noncovered loans	8,099,928			7,748,944			7,408,219
			Allowance for noncovered loan losses	(103,849		)	(107,699		)	(109,187		)
			Net noncovered loans	7,996,079			7,641,245			7,299,032
	Covered loans (includes loss share receivable of $152.6 million, $205.7 million and $239.4 million at June 30, 2012, December 31, 2011 and June 30, 2011, respectively)			1,271,888			1,497,140			1,755,107
			Allowance for covered loan losses	(42,606		)	(36,417		)	(33,360		)
			Net covered loans	1,229,282			1,460,723			1,721,747
			Net loans	9,225,361			9,101,968			9,020,779
	Premises and equipment, net			184,851			192,949			191,674
	Goodwill			460,044			460,044			460,044
	Intangible assets			7,274			8,239			9,325
	Covered other real estate (includes loss share receivable of $0.3 million, $1.3 million and $5.1 million at June 30, 2012, December 31, 2011 and June 30, 2011, respectively)			54,549			54,505			58,502
	Accrued interest receivable and other assets			622,984			639,558			620,270
			Total assets	$	14,621,344		$	14,441,702		$	14,347,557
LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits:
		Noninterest-bearing		$	3,227,819		$	3,030,225		$	2,944,117
		Interest-bearing		1,080,790			1,062,896			842,280
		Savings and money market accounts		5,728,598			5,595,409			5,305,584
		Certificates and other time deposits		1,578,634			1,743,079			2,248,958
			Total deposits	11,615,841			11,431,609			11,340,939
	Federal funds purchased and securities sold under agreements to repurchase			896,910			866,265			809,570
	Wholesale borrowings			178,135			203,462			325,133
	Accrued taxes, expenses, and other liabilities			329,643			374,413			321,528
			Total liabilities	13,020,529			12,875,749			12,797,170
	Shareholders' equity:
		Preferred stock, without par value: authorized and unissued 7,000,000 shares		—			—			—
		Preferred stock, Series A, without par value: designated 800,000 shares; none outstanding		—			—			—
		Convertible preferred stock, Series B, without par value: designated 220,000 shares; none outstanding		—			—			—
		Common stock, without par value; authorized 300,000,000 shares; issued: June 30, 2012, December 31, 2011 and June 30, 2011 - 115,121,731 shares		127,937			127,937			127,937
		Capital surplus		472,138			479,882			477,449
		Accumulated other comprehensive loss		(18,425		)	(23,887		)	(9,145		)
		Retained earnings		1,157,422			1,131,203			1,103,608
		Treasury stock, at cost: June 30, 2012 - 5,481,058 shares; December 31, 2011 - 5,870,923 shares; June 30, 2011 -5,880,692 shares		(138,257		)	(149,182		)	(149,462		)
			Total shareholders' equity	1,600,815			1,565,953			1,550,387
			Total liabilities and shareholders' equity	$	14,621,344		$	14,441,702		$	14,347,557

FirstMerit Corporation Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBSIDIARIES
Average Consolidated Balance Sheets
	Quarterly Periods
(Unaudited)	June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)	2012			2012			2011			2011			2011
ASSETS
Cash and due from banks	$	410,533		$	378,736		$	621,899		$	517,150		$	588,487
Investment securities:
Held-to-maturity	127,769			90,664			89,166			85,664			79,012
Available-for-sale	3,429,411			3,459,439			3,231,195			3,429,631			3,382,943
Other investments	140,744			140,719			160,147			160,799			160,811
Loans held for sale	22,731			26,483			24,215			24,524			18,512
Noncovered loans:
Commercial	5,274,352			5,143,087			5,049,479			4,876,034			4,665,550
Residential mortgage	431,752			421,648			405,329			399,228			398,702
Installment	1,263,013			1,261,122			1,267,952			1,264,868			1,270,589
Home equity	750,859			738,154			744,326			741,497			736,117
Credit card	142,311			143,794			145,560			144,796			143,528
Leases	78,862			73,644			61,267			56,909			58,607
Total noncovered loans	7,941,149			7,781,449			7,673,913			7,483,332			7,273,093
Covered loans and loss share receivable	1,325,184			1,436,430			1,569,232			1,694,155			1,809,898
Total loans	9,266,333			9,217,879			9,243,145			9,177,487			9,082,991
Less: allowance for loan losses	143,565			142,628			141,360			138,441			143,721
Net loans	9,122,768			9,075,251			9,101,785			9,039,046			8,939,270
Total earning assets	12,986,988			12,935,184			12,747,868			12,878,105			12,724,269
Premises and equipment, net	187,181			190,669			193,219			192,218			192,584
Accrued interest receivable and other assets	1,117,377			1,134,976			1,201,815			1,161,596			1,119,589
TOTAL ASSETS	$	14,558,514		$	14,496,937		$	14,623,441		$	14,610,628		$	14,481,208
LIABILITIES
Deposits:
Noninterest-bearing	$	3,144,183		$	3,036,590		$	3,013,543		$	2,988,521		$	2,998,090
Interest-bearing	1,060,771			1,066,132			991,456			913,252			824,125
Savings and money market accounts	5,732,007			5,675,052			5,569,213			5,446,351			5,279,353
Certificates and other time deposits	1,618,322			1,694,247			1,842,334			2,099,558			2,363,170
Total deposits	11,555,283			11,472,021			11,416,546			11,447,682			11,464,738
Federal funds purchased and securities sold under agreements to repurchase	920,352			887,715			999,639			969,020			884,244
Wholesale borrowings	177,987			184,659			225,116			320,691			325,057
Total funds	12,653,622			12,544,395			12,641,301			12,737,393			12,674,039
Accrued taxes, expenses and other liabilities	305,705			371,533			410,079			302,824			273,314
Total liabilities	12,959,327			12,915,928			13,051,380			13,040,217			12,947,353
SHAREHOLDERS' EQUITY
Common stock	127,937			127,937			127,937			127,937			127,937
Capital surplus	473,650			481,856			479,257			477,864			479,078
Accumulated other comprehensive loss	(18,363		)	(19,862		)	(15,198		)	(2,211		)	(16,402		)
Retained earnings	1,156,324			1,140,953			1,129,392			1,116,207			1,095,270
Treasury stock	(140,361		)	(149,875		)	(149,327		)	(149,386		)	(152,028		)
Total shareholders' equity	1,599,187			1,581,009			1,572,061			1,570,411			1,533,855
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	14,558,514		$	14,496,937		$	14,623,441		$	14,610,628		$	14,481,208

FirstMerit Corporation Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBIDARIES
Average Consolidated Balance Sheets
Fully Tax-equivalent Interest Rates and Interest Differential

	Three months ended						Three months ended						Three months ended
	June 30, 2012						March 31, 2012						June 30, 2011
(Unaudited)	Average				Average		Average				Average		Average				Average
(Dollars in thousands)	Balance			Interest	Rate		Balance			Interest	Rate		Balance			Interest	Rate
ASSETS
Cash and due from banks	410,533						$	378,736					$	588,487
Investment securities and federal funds sold:
U.S. Treasury securities and U.S. Government agency obligations (taxable)	2,823,055			19,028	2.71	%	2,882,045			19,679	2.75	%	2,958,993			19,942	2.70	%
Obligations of states and political subdivisions (tax exempt)	482,475			6,254	5.21	%	436,804			5,864	5.40	%	368,790			5,155	5.61	%
Other securities and federal funds sold	392,394			2,756	2.82	%	371,973			2,739	2.96	%	294,983			2,235	3.04	%
Total investment securities and federal funds sold	3,697,924			28,038	3.05	%	3,690,822			28,282	3.08	%	3,622,766			27,332	3.03	%
Loans held for sale	22,731			238	4.21	%	26,483			283	4.30	%	18,512			221	4.79	%
Loans, including loss share receivable	9,266,333			103,245	4.48	%	9,217,879			103,156	4.50	%	9,082,991			107,956	4.77	%
Total earning assets	12,986,988			131,521	4.07	%	12,935,184			131,721	4.10	%	12,724,269			135,509	4.27	%
Allowance for loan losses	(143,565		)				(142,628		)				(143,721		)
Other assets	1,304,558						1,325,645						1,312,173
Total assets	$	14,558,514					$	14,496,937					$	14,481,208
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	3,144,183		—	—	%	$	3,036,590		—	—	%	$	2,998,090		—	—	%
Interest-bearing	1,060,771			236	0.09	%	1,066,132			247	0.09	%	824,125			177	0.09	%
Savings and money market accounts	5,732,007			5,033	0.35	%	5,675,052			5,103	0.36	%	5,279,353			7,398	0.56	%
Certificates and other time deposits	1,618,322			3,169	0.79	%	1,694,247			3,524	0.84	%	2,363,170			5,606	0.95	%
Total deposits	11,555,283			8,438	0.29	%	11,472,021			8,874	0.31	%	11,464,738			13,181	0.46	%
Securities sold under agreements to repurchase	920,352			276	0.12	%	887,715			268	0.12	%	884,244			940	0.43	%
Wholesale borrowings	177,987			1,118	2.53	%	184,659			1,151	2.51	%	325,057			1,653	2.04	%
Total interest bearing liabilities	9,509,439			9,832	0.42	%	9,507,805			10,293	0.44	%	9,675,949			15,774	0.65	%
Other liabilities	305,705						371,533						273,314
Shareholders' equity	1,599,187						1,581,009						1,533,855
Total liabilities and shareholders' equity	$	14,558,514					$	14,496,937					$	14,481,208
Net yield on earning assets	$	12,986,988		121,689	3.77	%	$	12,935,184		121,428	3.78	%	$	12,724,269		119,735	3.77	%
Interest rate spread					3.66	%					3.66	%					3.62	%

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 Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBSIDARIES
Average Consolidated Balance Sheets
Fully Tax-equivalent Interest Rates and Interest Differential

	Six months ended						Six months ended
	June 30, 2012						June 30, 2011
(Unaudited)	Average				Average		Average				Average
(Dollars in thousands)	Balance			Interest	Rate		Balance			Interest	Rate
ASSETS
Cash and due from banks	394,634						$	554,732
Investment securities and federal funds sold:
U.S. Treasury securities and U.S. Government agency obligations (taxable)	2,852,550			38,707	2.73	%	2,871,510			39,309	2.76	%
Obligations of states and political subdivisions (tax exempt)	459,640			12,118	5.30	%	363,182			10,436	5.79	%
Other securities and federal funds sold	382,184			5,494	2.89	%	287,111			4,352	3.06	%
Total investment securities and federal funds sold	3,694,374			56,319	3.07	%	3,521,803			54,097	3.10	%
Loans held for sale	24,607			522	4.27	%	20,532			494	4.85	%
Loans, including loss share receivable	9,242,105			206,400	4.49	%	9,100,729			222,520	4.93	%
Total earning assets	12,961,086			263,241	4.08	%	12,643,064			277,111	4.42	%
Allowance for loan losses	(143,096		)				(138,920		)
Other assets	1,314,888						1,316,576
Total assets	$	14,527,512					$	14,375,452
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	3,090,386		—	—	%	$	2,936,827		—	—	%
Interest-bearing	1,063,451			483	0.09	%	832,787			361	0.09	%
Savings and money market accounts	5,703,530			10,136	0.36	%	5,129,894			15,243	0.60	%
Certificates and other time deposits	1,656,284			6,693	0.81	%	2,493,167			12,433	1.01	%
Total deposits	11,513,651			17,312	0.30	%	11,392,675			28,037	0.50	%
Securities sold under agreements to repurchase	904,033			544	0.12	%	866,306			1,855	0.43	%
Wholesale borrowings	181,323			2,269	2.52	%	325,197			3,292	2.04	%
Total interest bearing liabilities	9,508,621			20,125	0.43	%	9,647,351			33,184	0.65	%
Other liabilities	338,408						266,184
Shareholders' equity	1,590,097						1,525,090
Total liabilities and shareholders' equity	$	14,527,512					$	14,375,452
Net yield on earning assets	$	12,961,086		243,116	3.77	%	$	12,643,064		243,927	3.89	%
Interest rate spread					3.66	%					3.72	%

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 Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income

(Unaudited)				Quarters ended						Six months ended
(Dollars in thousands except per share data)				June 30,						June 30,
				2012			2011			2012			2011
Interest income:
	Loans and loans held for sale			$	103,126		$	107,904		206,208			222,460
	Investment securities
		Taxable		21,783			22,176			44,201			43,661
		Tax-exempt		3,846			3,137			7,426			6,332
		Total investment securities interest		25,629			25,313			51,627			49,993
			Total interest income	128,755			133,217			257,835			272,453
Interest expense:
	Deposits:
		Interest-bearing		236			177			483			361
		Savings and money market accounts		5,033			7,398			10,136			15,243
		Certificates and other time deposits		3,169			5,606			6,693			12,433
	Securities sold under agreements to repurchase			276			940			544			1,855
	Wholesale borrowings			1,118			1,653			2,269			3,292
		Total interest expense		9,832			15,774			20,125			33,184
		Net interest income		118,923			117,443			237,710			239,269
Provision for noncovered loan losses				8,766			10,138			16,895			27,156
Provision for covered loan losses				3,430			7,481			9,362			12,812
		Net interest income after provision for loan losses		106,727			99,824			211,453			199,301
Other income:
	Trust department income			5,730			5,863			11,357			11,377
	Service charges on deposits			14,478			15,712			28,887			30,622
	Credit card fees			11,216			13,510			21,396			25,717
	ATM and other service fees			3,890			3,063			7,680			5,980
	Bank owned life insurance income			2,923			3,015			5,979			8,256
	Investment services and insurance			2,388			1,972			4,635			4,419
	Investment securities gains, net			548			889			808			889
	Loan sales and servicing income			5,139			2,891			11,830			5,676
	Other operating income			8,989			4,576			14,455			11,311
		Total other income		55,301			51,491			107,027			104,247
Other expenses:
	Salaries, wages, pension and employee benefits			61,598			56,713			125,571			116,583
	Net occupancy expense			7,971			8,086			16,563			16,680
	Equipment expense			7,598			6,816			14,702			13,652
	Stationery, supplies and postage			2,285			2,750			4,428			5,455
	Bankcard, loan processing and other costs			8,858			8,266			16,511			15,829
	Professional services			9,307			5,940			12,659			11,734
	Amortization of intangibles			483			543			966			1,086
	FDIC insurance expense			3,463			4,581			7,183			8,947
	Other operating expense			17,514			16,373			34,262			34,548
		Total other expenses		119,077			110,068			232,845			224,514
			Income before income tax expense	42,951			41,247			85,635			79,034
Income tax expense				12,366			11,484			24,706			21,710
			Net income	$	30,585		$	29,763		$	60,929		$	57,324
Other comprehensive income, net of taxes
	Changes in unrealized securities' holding gains and losses			$	4,103		$	17,198		$	5,987		$	17,536
	Reclassification for realized securities' gains			(356		)	(578		)	(525		)	(578		)
	Total other comprehensive gain, net of taxes			3,747			16,620			5,462			16,958
		Comprehensive income		$	34,332		$	46,383		$	66,391		$	74,282
Net income applicable to common shares				$	30,585		$	29,763		$	60,929		$	57,324
Net income used in diluted EPS calculation				$	30,585		$	29,763		$	60,929		$	57,324
Weighted average number of common shares outstanding - basic				109,562			109,138			109,386			108,954
Weighted average number of common shares outstanding - diluted				109,562			109,139			109,386			108,955
Basic earnings per common share				$	0.28		$	0.27		$	0.56		$	0.53
Diluted earnings per common share				$	0.28		$	0.27		$	0.56		$	0.53
Dividend per common share				$	0.16		$	0.16		$	0.32		$	0.32

FirstMerit Corporation Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income---linked quarters

	Quarterly Results
(Unaudited)	2012		2012		2011			2011		2011
(Dollars in thousands, except share data)	2nd Qtr		1st Qtr		4th Qtr			3rd Qtr		2nd Qtr
Loans and loans held for sale	$	103,126	$	103,082	$	107,516		$	108,417	$	107,904
Investment securities	25,629		25,998		24,732			25,138		25,313
Total interest income	128,755		129,080		132,248			133,555		133,217
Interest on deposits:
Interest-bearing	236		247		237			218		177
Savings and money market accounts	5,033		5,103		5,998			6,929		7,398
Certificates and other time deposits	3,169		3,524		3,201			4,370		5,606
Securities sold under agreements to repurchase	276		268		512			977		940
Wholesale borrowings	1,118		1,151		1,334			1,669		1,653
Total interest expense	9,832		10,293		11,282			14,163		15,774
Net interest income	118,923		118,787		120,966			119,392		117,443
Provision for noncovered loan losses	8,766		8,129		12,275			14,604		10,138
Provision for covered loan losses	3,430		5,932		2,773			4,768		7,481
Net interest income after provision for loan losses	106,727		104,726		105,918			100,020		99,824
Other income:
Trust department income	5,730		5,627		5,413			5,607		5,863
Service charges on deposits	14,478		14,409		15,622			17,838		15,712
Credit card fees	11,216		10,180		10,182			13,640		13,510
ATM and other service fees	3,890		3,790		3,920			3,801		3,063
Bank owned life insurance income	2,923		3,056		3,381			3,182		3,015
Investment services and insurance	2,388		2,247		1,844			1,965		1,972
Investment securities gains, net	548		260		5,790			4,402		889
Loan sales and servicing income	5,139		6,691		5,102			3,426		2,891
Other operating income	8,989		5,466		8,483			6,911		4,576
Total other income	55,301		51,726		59,737			60,772		51,491
Other expenses:
Salaries, wages, pension and employee benefits	61,598		63,973		62,546			61,232		56,713
Net occupancy expense	7,971		8,592		7,270			8,464		8,086
Equipment expense	7,598		7,104		7,234			7,073		6,816
Stationery, supplies and postage	2,285		2,143		2,719			2,517		2,750
Bankcard, loan processing and other costs	8,858		7,653		7,948			8,449		8,266
Professional services	9,307		3,352		5,763			5,732		5,940
Amortization of intangibles	483		483		543			543		543
FDIC insurance expense	3,463		3,720		5,119			3,240		4,581
Other operating expense	17,514		16,748		24,732			18,707		16,373
Total other expenses	119,077		113,768		123,874			115,957		110,068
Income before income tax expense	42,951		42,684		41,781			44,835		41,247
Income taxes	12,366		12,340		11,285			13,098		11,484
Net income	30,585		30,344		30,496			31,737		29,763
Other comprehensive income (loss), net of taxes	3,747		1,715		(19,233		)	4,491		16,620
Comprehensive income	$	34,332	$	32,059	$	11,263		$	36,228	$	46,383
Net income applicable to common shares	$	30,585	$	30,344	$	30,496		$	31,737	$	29,763
Net income used in diluted EPS calculation	$	30,585	$	30,344	$	30,496		$	31,737	$	29,763
Weighted average common shares - basic	109,562		109,211		109,249			109,245		109,138
Weighted average common shares - diluted	109,562		109,211		109,249			109,246		109,139
Basic earnings per common share	$	0.28	$	0.28	$	0.28		$	0.29	$	0.27
Diluted earnings per common share	$	0.28	$	0.28	$	0.28		$	0.29	$	0.27

FirstMerit Corporation Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBSIDIARIES
Asset Quality Information (excluding Acquired Assets)

(Unaudited, except December 31, 2011 annual period which is derived from the audited financial statements)
(Dollars in thousands, except ratios)
	Quarterly Periods															Annual Period
	June 30,			March 31,			December 31,			September 30,			June 30,			December 31,
Allowance for Credit Losses	2012			2012			2011			2011			2011			2011
Allowance for noncovered loan losses, beginning of period	$	103,849		$	107,699		$	109,187		$	109,187		$	114,690		$	114,690
Provision for noncovered loan losses	8,766			8,129			12,275			14,604			10,138			54,035
Charge-offs	15,014			17,417			18,984			20,014			20,958			82,768
Recoveries	6,248			5,438			5,221			5,410			5,317			21,742
Net charge-offs	8,766			11,979			13,763			14,604			15,641			61,026
Allowance for noncovered loan losses, end of period	$	103,849		$	103,849		$	107,699		$	109,187		$	109,187		$	107,699
Reserve for unfunded lending commitments, beginning of period	$	5,410		$	6,373		$	6,360		$	5,799		$	7,202		$	8,849
Provision for/(relief of) credit losses	256			(963		)	13			561			(1,403		)	(2,476		)
Reserve for unfunded lending commitments, end of period	$	5,666		$	5,410		$	6,373		$	6,360		$	5,799		$	6,373
Allowance for Credit Losses	$	109,515		$	109,259		$	114,072		$	115,547		$	114,986		$	114,072
Ratios (a)
Provision for loan losses as a % of average loans	0.45		%	0.43		%	0.65		%	0.79		%	0.57		%	0.75		%
Net charge-offs as a % of average loans	0.45		%	0.63		%	0.73		%	0.79		%	0.89		%	0.85		%
Allowance for loan losses as a % of period-end loans	1.29		%	1.34		%	1.41		%	1.46		%	1.51		%	1.41		%
Allowance for credit losses as a % of period-end loans	1.36		%	1.41		%	1.49		%	1.55		%	1.59		%	1.49		%
Allowance for loan losses as a % of nonperforming loans	222.44		%	194.83		%	166.64		%	160.09		%	150.31		%	166.64		%
Allowance for credit losses as a % of nonperforming loans	234.57		%	204.98		%	176.50		%	169.42		%	158.30		%	176.50		%
Asset Quality (a)
Impaired loans:
Nonaccrual	$	38,381		$	44,486		$	55,755		$	59,928		$	63,688		$	55,755
Other nonperforming loans:
Nonaccrual	8,306			8,815			8,876			8,275			8,951			8,876
Total nonperforming loans	46,687			53,301			64,631			68,203			72,639			64,631
Other real estate ("ORE")	14,393			14,670			16,463			22,172			27,207			16,463
Total nonperforming assets ("NPAs")	$	61,080		$	67,971		$	81,094		$	90,375		$	99,846		$	81,094
NPAs as % of period-end loans + ORE	0.76		%	0.87		%	1.06		%	1.21		%	1.38		%	1.06		%
Past due 90 days or more & accruing interest	$	2,960		$	5,839		$	8,285		$	4,402		$	10,424		$	8,285

(a) Excludes acquired loans and related loss share receivable with a period end balance of $1.3 billion, $1.5 billion, $1.6 billion, $1.8 billion and $1.9 billion and covered ORE and related loss share receivable with a period end balance of $54.5 million, $56.4 million, $54.5 million, $61.9 million and $58.5 million at June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011, respectively.

FirstMerit Corporation Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBSIDIARIES
Noninterest Income and Noninterest Expense Detail

(Unaudited)
(Dollars in thousands)
	2012		2012		2011		2011		2011
QUARTERLY OTHER INCOME DETAIL	2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr
Trust department income	$	5,730	$	5,627	$	5,413	$	5,607	$	5,863
Service charges on deposits	14,478		14,409		15,622		17,838		15,712
Credit card fees	11,216		10,180		10,182		13,640		13,510
ATM and other service fees	3,890		3,790		3,920		3,801		3,063
Bank owned life insurance income	2,923		3,056		3,381		3,182		3,015
Investment services and insurance	2,388		2,247		1,844		1,965		1,972
Investment securities gains, net	548		260		5,790		4,402		889
Loan sales and servicing income	5,139		6,691		5,102		3,426		2,891
Other operating income	8,989		5,466		8,483		6,911		4,576
Total Other Income	$	55,301	$	51,726	$	59,737	$	60,772	$	51,491
	2012		2012		2011		2011		2011
QUARTERLY OTHER EXPENSES DETAIL	2nd Qtr		1st Qtr		4th Qtr		3rd Qtr		2nd Qtr
Salaries, wages, pension and employee benefits	$	61,598	$	63,973	$	62,546	$	61,232	$	56,713
Net occupancy expense	7,971		8,592		7,270		8,464		8,086
Equipment expense	7,598		7,104		7,234		7,073		6,816
Taxes, other than income taxes	2,020		1,955		1,389		1,507		922
Stationery, supplies and postage	2,285		2,143		2,719		2,517		2,750
Bankcard, loan processing and other costs	8,858		7,653		7,948		8,449		8,266
Advertising	2,280		1,684		2,275		2,391		2,287
Professional services	9,307		3,352		5,763		5,732		5,940
Telephone	1,379		1,398		1,525		1,570		1,462
Amortization of intangibles	483		483		543		543		543
FDIC insurance expense	3,463		3,720		5,119		3,240		4,581
Other operating expense	11,835		11,711		19,543		13,239		11,702
Total Other Expenses	$	119,077	$	113,768	$	123,874	$	115,957	$	110,068

FirstMerit Corporation Reports Second Quarter 2012 EPS Results



FIRSTMERIT CORPORATION AND SUBSIDIARIES
Allowance for Noncovered Loan Losses - Net Charge-off Detail

(Unaudited)	Quarters ended						Six months ended						Year ended
(Dollars in thousands)	June 30,						June 30,						December 31,
	2012			2011			2012			2011			2011
Allowance for noncovered loan losses - beginning of period	$	103,849		$	114,690		107,699			114,690			$	114,690
Loans charged off:
Commercial	6,941			8,219			13,940			16,143			31,943
Residential mortgage	878			1,351			1,740			3,015			4,819
Installment	3,696			6,202			8,934			14,293			25,839
Home equity	1,465			2,115			3,789			4,271			8,691
Credit cards	1,645			2,297			3,228			4,615			7,846
Leases	—			127			—			127			778
Overdrafts	389			647			800			1,306			2,852
Total	15,014			20,958			32,431			43,770			82,768
Recoveries:
Commercial	1,966			528			2,660			1,136			2,703
Residential mortgage	56			29			91			118			221
Installment	3,004			3,700			6,184			7,388			13,639
Home equity	593			322			1,238			789			1,985
Credit cards	465			557			1,095			1,204			2,264
Manufactured housing	15			18			37			49			119
Leases	1			2			38			34			37
Overdrafts	148			161			343			393			774
Total	6,248			5,317			11,686			11,111			21,742
Net charge-offs	8,766			15,641			20,745			32,659			61,026
Provision for noncovered loan losses	8,766			10,138			16,895			27,156			54,035
Allowance for noncovered loan losses - end of period	$	103,849		$	109,187		$	103,849		$	109,187		$	107,699

Average loans (a)	$	7,857,840		$	7,080,109		$	7,767,901		$	7,022,092		$	7,217,349
Ratio to average loans (a):
(Annualized) net charge-offs	0.45		%	0.89		%	0.54		%	0.94		%	0.85		%
Provision for loan losses	0.45		%	0.57		%	0.44		%	0.78		%	0.75		%
Loans, period-end (a)	$	8,031,998		$	7,216,015		$	8,031,998		$	7,216,015		$	7,635,776

Allowance for credit losses (a):	$	109,515		$	114,986		$	109,515		$	114,986		$	114,072
As a multiple of (annualized) net charge-offs	3.11			1.83			2.63			1.75			1.87
Allowance for noncovered loan losses (a):
As a percent of period-end noncovered loans	1.29		%	1.51		%	1.29		%	1.51		%	1.41		%
As a multiple of (annualized) net noncovered charge-offs	2.95			1.74			2.49			1.66			1.76
(a) Excludes acquired loans and loss share receivable.

FIRSTMERIT CORP /OH/ - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 24, 2012

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