Attached files
| file | filename |
|---|---|
| EX-99.2 - EX99.2 - FIRSTMERIT CORP /OH/ | ex992q32014presr62final20141.pdf |
| 8-K - 8-K - FIRSTMERIT CORP /OH/ | a8k_q3x2014xdoc.htm |
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
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 Third Quarter 2014 EPS of $0.37 Per Share
Quarterly Highlights include:
• | Profitability Sustained: 62nd consecutive quarter of profitability. |
• | Organic growth continued: Total loan growth of $272.4 million, or 1.82% from the prior quarter. |
• | Credit quality remained solid: Net charge-offs to average originated loans of 0.20%; nonperforming assets as a percent of period end originated loans plus other real estate at 0.52%. |
• | Balance sheet remained strong: Strong tangible common equity ratio at 8.01%. |
Akron, Ohio (October 28, 2014) - FirstMerit Corporation (Nasdaq: FMER) (the "Corporation") reported third quarter 2014 net income of $63.9 million, or $0.37 per diluted share. This compares with $59.5 million, or $0.35 per diluted share, for the second quarter 2014 and $40.7 million, or $0.23 per diluted share, for the third quarter 2013.
Returns on average common equity (“ROE”) and average assets (“ROA”) for the third quarter 2014 were 9.03% and 1.03%, respectively, compared with 8.62% and 0.98%, respectively, for the second quarter 2014 and 6.07% and 0.67%, respectively, for the third quarter 2013.
“In the third quarter, we continued to capitalize on multiple opportunities throughout our markets to execute on our primary goal of organic growth," said Paul Greig, chairman, president and CEO, FirstMerit Corporation. "Our significant average total loan growth in the quarter demonstrates our success in this initiative. Importantly, we align our growth with strict underwriting standards and appropriate credit risk management practices to generate profitability. Our focus on credit quality resulted in another solid quarter of asset quality metrics.”
1
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
"Acquired loans," as used herein, are those assumed in the Citizens acquisition. As used herein, "originated loans" refer to loans that have been originated in the normal course of business and "covered loans" refer to loans covered by loss sharing agreements with the FDIC providing considerable protection against credit risk.
Net Interest Income
Net interest income on a fully tax-equivalent (“TE”) basis was $197.6 million in the third quarter 2014 compared with $199.7 million in the second quarter 2014 and $207.1 million in the third quarter 2013.
Net interest margin was 3.60% for the third quarter 2014 compared with 3.75% for the second quarter 2014 and 4.05% for the third quarter 2013. Net interest margin compression in the third quarter, compared with the prior quarter, resulted from lower accretion from the acquired and covered loan portfolios due to the continued decline in the loan balances.
Average originated loans were $11.8 billion during the third quarter 2014, an increase of $722.2 million, or 6.51%, compared with the second quarter 2014, and an increase of $2.4 billion, or 25.98%, compared with the third quarter 2013. Average originated commercial loans increased $349.8 million, or 4.87%, compared with the prior quarter, and increased $1.4 billion, or 22.89%, compared with the year-ago quarter.
Average deposits were $19.5 billion during the third quarter 2014, an increase of $35.0 million, or 0.18%, compared with the second quarter 2014, and an increase of $75.6 million, or 0.39%, compared with the third quarter 2013. During the third quarter 2014, average core deposits, which exclude time deposits, increased $33.2 million, or 0.19%, compared with the second quarter 2014 and increased $460.9 million, or 2.75%, compared with the third quarter 2013. Average time deposits increased $1.8 million, or 0.08%, and decreased $385.3 million, or 14.16%, respectively, over the prior and year-ago quarters. For the third quarter 2014, average core deposits accounted for 88.04% of total average deposits, compared with 88.03% for the second quarter 2014 and 86.02% for the third quarter 2013.
Average investments decreased $16.3 million, or 0.24%, compared with the second quarter 2014 and increased $487.0 million, or 7.92%, compared with the third quarter 2013.
Noninterest Income
Noninterest income, excluding gains and losses on securities transactions, for the third quarter 2014 was $69.7 million, a decrease of $2.8 million, or 3.81%, from the second quarter 2014 and a decrease of $1.4 million, or 1.93%, from the third quarter 2013. Included in noninterest income in the third quarter 2014 was $1.2 million of net losses on covered loan resolutions, compared to net gains of $4.1 million and $1.8 million in the second quarter 2014 and third quarter 2013, respectively.
Noninterest income, excluding net securities gains and losses, as a percentage of net revenue for the third quarter 2014 was 26.08% compared with 26.63% for second quarter 2014 and 25.56% for the third quarter 2013. Net revenue is defined as net interest income, on an TE basis, plus other income, excluding gains and losses from securities sales.
2
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
Noninterest Expense
Noninterest expense for the third quarter 2014 was $163.1 million, a decrease of $4.3 million, or 2.54%, from the second quarter 2014 and a decrease of $47.5 million, or 22.53%, from the third quarter 2013. There were no merger related costs included in noninterest expense in the third quarter of 2014, however, included in noninterest expense in the third quarter 2013 were merger related costs associated with the Citizens acquisition of $33.4 million. The Corporation's efficiency ratio was 59.92% for the third quarter 2014, compared with 60.43% for the second quarter 2014 and 74.64% for the third quarter 2013.
The effective tax rate was 29.76% for the third quarter 2014 compared with 30.37% for the second quarter 2014 and 29.13% for the third quarter 2013.
Asset Quality (excluding acquired loans and covered assets)
Due to the impact of business combination accounting and protection against credit risk from FDIC loss sharing agreements, acquired loans and covered assets are excluded from the asset quality discussion to provide for improved comparability to prior periods and better perspective into asset quality trends. Acquired loans are recorded at fair value at the date of acquisition with no allowance brought forward in accordance with business combination accounting. Impaired acquired and covered loans are considered to be performing due to the application of the accretion method under the applicable accounting guidance.
Net charge-offs on originated loans totaled $5.9 million, or 0.20% of average originated loans in the third quarter 2014, compared with $6.2 million, or 0.22% of average originated loans, in the second quarter 2014 and $2.9 million, or 0.12% of average originated loans, in the third quarter 2013.
Nonperforming assets totaled $63.1 million at September 30, 2014, an increase of $2.2 million, or 3.61%, compared with June 30, 2014 and an increase of $7.7 million, or 13.88%, compared with September 30, 2013. Nonperforming assets at September 30, 2014 represented 0.52% of period-end originated loans plus other real estate compared with 0.53% at June 30, 2014 and 0.57% at September 30, 2013.
The allowance for originated loan losses totaled $90.9 million at September 30, 2014. At September 30, 2014, the allowance for originated loan losses was 0.75% of period-end originated loans compared with 0.80% at June 30, 2014 and 1.00% at September 30, 2013. The allowance for credit losses is the sum of the allowance for originated loan losses and the reserve for unfunded lending commitments. For comparative purposes, the allowance for credit losses was 0.81% of period end originated loans at September 30, 2014, compared with 0.86% at June 30, 2014 and 1.09% at September 30, 2013. The allowance for credit losses to nonperforming loans was 248.85% at September 30, 2014, compared with 269.61% at June 30, 2014 and 300.06% at September 30, 2013.
Balance Sheet
The Corporation’s total assets at September 30, 2014 were $24.6 billion, an increase of $43.8 million, or 0.18%, compared with June 30, 2014 and an increase of $470.5 million, or 1.95%, compared with September 30, 2013.
Total deposits were $19.4 billion at September 30, 2014, an increase of $68.5 million, or 0.36%, from June 30, 2014 and a decrease of $122.6 million, or 0.63%, from September 30, 2013. Core deposits totaled $17.0 billion at September 30, 2014, a decrease of $54.2 million, or 0.32%, from June 30, 2014 and an increase of $123.3 million, or 0.73%, from September 30, 2013.
3
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
Shareholders’ equity was $2.8 billion as of September 30, 2014 and June 30, 2014, and $2.7 billion as of September 30, 2013. The Corporation maintained a strong capital position as tangible common equity to assets was 8.01% at September 30, 2014, compared with 7.89% at June 30, 2014 and 7.41% at September 30, 2013. The common share cash dividend paid in the third quarter 2014 was $0.16 per share.
Third Quarter 2014 Conference Call
FirstMerit (Nasdaq: FMER) senior management will host an earnings conference call today at 11:00 a.m. (Eastern Time) to provide an overview of third quarter results and highlights. To participate in the conference call, please dial (888) 693-3477 ten minutes before start time and provide the reservation number: 19982852. A replay of the conference call will be available at approximately 2:00 p.m. (Eastern Time) on October 28, 2014 through November 11, 2014 by dialing (855) 859-2056, and entering the PIN: 19982852. 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.
Non-GAAP Measures: This news release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Corporation's management uses these non-GAAP measures in their analysis of the Corporation's performance and the efficiency of its operations. Management believes that these non-GAAP measures provide a greater understanding of ongoing operations of the Corporation and enhance comparability of results with prior periods, and facilitate investors' assessments of business and performance trends in comparison to others in the financial services industry. The Corporation believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. The Corporation's management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Corporation's underlying performance. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
About FirstMerit Corporation
FirstMerit Corporation is a diversified financial services company headquartered in Akron, Ohio, with assets of approximately $24.6 billion as of September 30, 2014, and 381 banking offices and 411 ATM locations in Ohio, Michigan, Wisconsin, Illinois and Pennsylvania. 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 and FirstMerit Title Agency, Ltd.
Subsequent Events
The Corporation is required under GAAP to evaluate subsequent events through the filing of the its consolidated financial statements for the quarter ended September 30, 2014 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, 2014 and will adjust amounts preliminarily reported, if necessary.
4
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
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, the Corporation's ability to realize the synergies and benefits contemplated by the acquisition of Citizens, such as it being accretive to earnings and expanding the Corporation's geographic presence, in the time frame anticipated or at all, 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.
5
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||
Consolidated Financial Highlights | |||||||||||||||
(Unaudited) | Quarters | ||||||||||||||
(Dollars in thousands, except per share amounts) | 2014 | 2014 | 2014 | 2013 | 2013 | ||||||||||
3rd qtr | 2nd qtr | 1st qtr | 4th qtr | 3rd qtr | |||||||||||
EARNINGS | |||||||||||||||
Net interest income TE (a) | $ | 197,644 | $ | 199,666 | $ | 197,854 | $ | 202,145 | $ | 207,079 | |||||
TE adjustment (a) | 4,066 | 4,089 | 3,954 | 4,077 | 3,739 | ||||||||||
Provision for originated loan losses | 4,862 | 5,993 | 3,654 | 1,552 | 2,523 | ||||||||||
Provision for acquired loan losses | 4,411 | 5,815 | 7,827 | 5,515 | 2,033 | ||||||||||
Provision/(recapture) for covered loan losses | (81 | ) | 3,445 | 3,055 | 2,983 | 1,823 | |||||||||
Noninterest income | 69,733 | 72,560 | 67,270 | 72,420 | 71,090 | ||||||||||
Noninterest expense | 163,145 | 167,400 | 169,331 | 178,620 | 210,599 | ||||||||||
Net income | 63,898 | 59,519 | 53,455 | 57,174 | 40,715 | ||||||||||
Diluted EPS (c) | 0.37 | 0.35 | 0.31 | 0.33 | 0.23 | ||||||||||
PERFORMANCE RATIOS | |||||||||||||||
Return on average assets (ROA) | 1.03 | % | 0.98 | % | 0.90 | % | 0.94 | % | 0.67 | % | |||||
Return on average equity (ROE) | 9.03 | % | 8.62 | % | 7.93 | % | 8.48 | % | 6.07 | % | |||||
Return on average tangible common equity (d) | 13.41 | % | 12.92 | % | 11.98 | % | 12.96 | % | 9.29 | % | |||||
Net interest margin TE (a) | 3.60 | % | 3.75 | % | 3.84 | % | 3.89 | % | 4.05 | % | |||||
Efficiency ratio (e) | 59.92 | % | 60.43 | % | 62.77 | % | 64.08 | % | 74.64 | % | |||||
Number of full-time equivalent employees | 4,302 | 4,392 | 4,521 | 4,570 | 4,666 | ||||||||||
MARKET DATA | |||||||||||||||
Book value per common share | $ | 17.05 | $ | 16.88 | $ | 16.62 | $ | 16.38 | $ | 16.08 | |||||
Tangible book value per common share (d) | 11.52 | 11.33 | 11.03 | 10.77 | 10.47 | ||||||||||
Period end common share market value | 17.62 | 19.75 | 20.83 | 22.23 | 21.72 | ||||||||||
Market as a % of book | 103 | % | 117 | % | 125 | % | 136 | % | 135 | % | |||||
Cash dividends per common share | $ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.16 | |||||
Common Stock dividend payout ratio | 43.24 | % | 45.71 | % | 51.61 | % | 48.48 | % | 69.57 | % | |||||
Average basic common shares | 165,389 | 165,335 | 165,060 | 165,054 | 165,044 | ||||||||||
Average diluted common shares | 165,804 | 166,147 | 166,004 | 166,097 | 165,874 | ||||||||||
Period end common shares | 165,384 | 165,393 | 165,087 | 165,056 | 165,045 | ||||||||||
Common shares repurchased | 10 | 186 | 51 | 17 | 7 | ||||||||||
Common Stock market capitalization | $ | 2,914,066 | $ | 3,266,512 | $ | 3,438,762 | $ | 3,669,195 | $ | 3,584,777 | |||||
ASSET QUALITY (excluding acquired and covered loans) (b) | |||||||||||||||
Gross charge-offs | $ | 11,410 | $ | 11,148 | $ | 13,160 | $ | 9,913 | $ | 8,515 | |||||
Net charge-offs | 5,929 | 6,159 | 8,022 | 3,359 | 2,877 | ||||||||||
Allowance for originated loan losses | 90,883 | 91,950 | 92,116 | 96,484 | 98,291 | ||||||||||
Reserve for unfunded lending commitments | 6,966 | 7,107 | 7,481 | 7,907 | 8,493 | ||||||||||
Nonperforming assets (NPAs) | 63,119 | 60,922 | 62,711 | 60,883 | 55,426 | ||||||||||
Net charge-offs to average loans ratio | 0.20 | % | 0.22 | % | 0.31 | % | 0.13 | % | 0.12 | % | |||||
Allowance for originated loan losses to period-end loans | 0.75 | % | 0.80 | % | 0.85 | % | 0.94 | % | 1.00 | % | |||||
Allowance for credit losses to period-end loans | 0.81 | % | 0.86 | % | 0.92 | % | 1.02 | % | 1.09 | % | |||||
NPAs to loans and other real estate | 0.52 | % | 0.53 | % | 0.58 | % | 0.60 | % | 0.57 | % | |||||
Allowance for originated loan losses to nonperforming loans | 231.13 | % | 250.27 | % | 212.01 | % | 228.62 | % | 276.19 | % | |||||
Allowance for credit losses to nonperforming loans | 248.85 | % | 269.61 | % | 229.23 | % | 247.35 | % | 300.06 | % | |||||
CAPITAL & LIQUIDITY | |||||||||||||||
Period end tangible common equity to assets (d) | 8.01 | % | 7.89 | % | 7.69 | % | 7.70 | % | 7.41 | % | |||||
Average equity to assets | 11.42 | % | 11.40 | % | 11.32 | % | 11.12 | % | 11.08 | % | |||||
Average equity to total loans | 18.58 | % | 18.90 | % | 19.04 | % | 18.81 | % | 18.97 | % | |||||
Average total loans to deposits | 77.36 | % | 75.15 | % | 73.11 | % | 72.84 | % | 72.11 | % | |||||
AVERAGE BALANCES | |||||||||||||||
Assets | $ | 24,583,776 | $ | 24,291,276 | $ | 24,144,570 | $ | 24,034,846 | $ | 24,013,594 | |||||
Deposits | 19,531,800 | 19,496,795 | 19,636,506 | 19,517,476 | 19,456,231 | ||||||||||
Originated loans | 11,814,314 | 11,092,101 | 10,448,383 | 9,988,587 | 9,377,826 | ||||||||||
Acquired loans, including covered loans, less loss share receivable | 3,295,547 | 3,558,810 | 3,907,802 | 4,227,693 | 4,652,101 | ||||||||||
Earning assets | 21,804,243 | 21,367,496 | 20,903,863 | 20,593,750 | 20,276,825 | ||||||||||
Shareholders' equity | 2,807,886 | 2,768,352 | 2,733,226 | 2,673,635 | 2,661,546 | ||||||||||
ENDING BALANCES | |||||||||||||||
Assets | $ | 24,608,207 | $ | 24,564,431 | $ | 24,498,661 | $ | 23,912,028 | $ | 24,137,730 | |||||
Deposits | 19,366,911 | 19,298,396 | 19,811,674 | 19,533,601 | 19,489,533 | ||||||||||
Originated loans | 12,071,759 | 11,467,193 | 10,826,913 | 10,213,387 | 9,789,139 | ||||||||||
Acquired loans, including covered loans,less loss share receivable | 3,139,521 | 3,458,453 | 3,726,952 | 4,025,758 | 4,401,711 | ||||||||||
Goodwill | 741,740 | 741,740 | 741,740 | 741,740 | 741,740 | ||||||||||
Intangible assets | 73,953 | 76,886 | 79,819 | 82,755 | 85,447 | ||||||||||
Earning assets | 21,930,840 | 21,789,773 | 21,715,302 | 21,048,910 | 21,297,250 | ||||||||||
Total shareholders' equity | 2,820,431 | 2,791,738 | 2,742,966 | 2,702,894 | 2,654,645 | ||||||||||
NOTES: | |||||||||||||||
(a) - The interest income earned on certain earning assets is completely or partially exempt from federal and/or state income taxes. As such, these tax-exempt securities typically yield lower returns than taxable securities. To provide more meaningful comparisons of net interest margins for all earning assets, net interest income on a taxable-equivalent basis is used in calculating net interest margin by increasing the interest earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under generally accepted accounting principles in the Consolidated Statements of Comprehensive Income.
(b) - Due to the impact of business combination accounting and protection of FDIC loss sharing agreements, which provide considerable protection against credit risk, acquired loans and covered assets are excluded from this table to provide for improved comparability to prior periods and better perspective into asset quality trends.
(c) - Net income used to determine diluted EPS was reduced by the cash dividends payable on the Corporation's 5.875% Non-Cumulative Perpetual Preferred Stock, Series A of approximately $1.5 million in each of the quarters presented.
6
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
(d) - Tangible book value per common share is a non-GAAP financial measure and is calculated based on tangible common equity divided by period end common shares outstanding. Tangible common equity excludes goodwill, intangible assets, and preferred stock. Management believes this non-GAAP measure serves as a useful tool to help evaluate the strength and discipline of a company's capital management strategies and as an additional, conservative measure of total company value.
(e) - The efficiency ratio is calculated as noninterest expense divided by total revenue, excluding net gains on the sale of securities of $14.0 thousand, $80.0 thousand, and $56.0 thousand in the quarters ended September 30, 2014, June 30, 2014, and March 31, 2014, respectively. There were no net gains on the sale of securities in the quarters ended December 31, 2013 or September 30, 2013.
7
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||
(Dollars in thousands) | September 30, | December 31, | September 30, | |||||||||||
(Unaudited, except December 31, 2013, which is derived from the audited financial statements) | 2014 | 2013 | 2013 | |||||||||||
ASSETS | ||||||||||||||
Cash and due from banks | $ | 429,699 | $ | 571,171 | $ | 505,228 | ||||||||
Interest-bearing deposits in banks | 55,629 | 346,651 | 742,039 | |||||||||||
Total cash and cash equivalents | 485,328 | 917,822 | 1,247,267 | |||||||||||
Investment securities: | ||||||||||||||
Held-to-maturity | 3,002,262 | 2,935,688 | 2,749,934 | |||||||||||
Available-for-sale | 3,462,990 | 3,273,174 | 3,256,259 | |||||||||||
Other investments | 148,421 | 180,803 | 270,369 | |||||||||||
Loans held for sale | 19,512 | 11,622 | 17,813 | |||||||||||
Loans | 15,242,026 | 14,300,972 | 14,260,836 | |||||||||||
Allowance for loan losses | (140,077 | ) | (141,252 | ) | (143,835 | ) | ||||||||
Net loans | 15,101,949 | 14,159,720 | 14,117,001 | |||||||||||
Premises and equipment, net | 318,690 | 327,054 | 324,337 | |||||||||||
Goodwill | 741,740 | 741,740 | 741,740 | |||||||||||
Intangible assets | 73,953 | 82,755 | 85,447 | |||||||||||
Covered other real estate | 51,434 | 65,234 | 70,791 | |||||||||||
Accrued interest receivable and other assets | 1,201,928 | 1,216,416 | 1,256,772 | |||||||||||
Total assets | $ | 24,608,207 | $ | 23,912,028 | $ | 24,137,730 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
Deposits: | ||||||||||||||
Noninterest-bearing | $ | 5,535,886 | $ | 5,459,029 | $ | 5,461,674 | ||||||||
Interest-bearing | 3,043,952 | 3,026,735 | 2,815,681 | |||||||||||
Savings and money market accounts | 8,396,064 | 8,587,167 | 8,575,292 | |||||||||||
Certificates and other time deposits | 2,391,009 | 2,460,670 | 2,636,886 | |||||||||||
Total deposits | 19,366,911 | 19,533,601 | 19,489,533 | |||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 1,273,290 | 851,535 | 1,049,801 | |||||||||||
Wholesale borrowings | 608,463 | 200,600 | 200,858 | |||||||||||
Long-term debt | 249,933 | 324,428 | 324,425 | |||||||||||
Accrued taxes, expenses, and other liabilities | 289,179 | 298,970 | 418,468 | |||||||||||
Total liabilities | 21,787,776 | 21,209,134 | 21,483,085 | |||||||||||
Shareholders' equity: | ||||||||||||||
5.875% Non-Cumulative Perpetual Preferred stock, Series A, without par value: authorized 115,000 shares; 100,000 issued | 100,000 | 100,000 | 100,000 | |||||||||||
Common stock warrant | 3,000 | 3,000 | 3,000 | |||||||||||
Common Stock, without par value; authorized 300,000,000 shares; issued: September 30, 2014 and December 31, 2013 - 170,183,540 shares; September 30, 2013 - 170,179,305 shares | 127,937 | 127,937 | 127,937 | |||||||||||
Capital surplus | 1,390,207 | 1,390,643 | 1,388,638 | |||||||||||
Accumulated other comprehensive loss | (49,583 | ) | (66,876 | ) | (83,613 | ) | ||||||||
Retained earnings | 1,371,453 | 1,277,975 | 1,248,554 | |||||||||||
Treasury stock, at cost: September 30, 2014 - 4,799,239; December 31, 2013 - 5,127,332 shares; September 30, 2013 - 5,134,681 shares | (122,583 | ) | (129,785 | ) | (129,871 | ) | ||||||||
Total shareholders' equity | 2,820,431 | 2,702,894 | 2,654,645 | |||||||||||
Total liabilities and shareholders' equity | $ | 24,608,207 | $ | 23,912,028 | $ | 24,137,730 | ||||||||
8
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES Period End Loans by Product Type (Unaudited) (Dollars in thousands) | |||||||||||||||
As of September 30, 2014 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 7,626,166 | $ | 1,272,244 | $ | 262,319 | $ | 9,160,729 | |||||||
Mortgage | 605,998 | 410,065 | 43,672 | 1,059,735 | |||||||||||
Installment | 2,277,533 | 809,820 | 5,148 | 3,092,501 | |||||||||||
Home equity | 1,062,013 | 252,975 | 83,278 | 1,398,266 | |||||||||||
Credit card | 160,113 | — | — | 160,113 | |||||||||||
Leases | 339,936 | — | — | 339,936 | |||||||||||
Subtotal | 12,071,759 | 2,745,104 | 394,417 | 15,211,280 | |||||||||||
Loss share receivable | — | — | 30,746 | 30,746 | |||||||||||
Total loans | 12,071,759 | 2,745,104 | 425,163 | 15,242,026 | |||||||||||
Allowance for loan losses | (90,883 | ) | (6,206 | ) | (42,988 | ) | (140,077 | ) | |||||||
Net loans | $ | 11,980,876 | $ | 2,738,898 | $ | 382,175 | $ | 15,101,949 | |||||||
As of June 30, 2014 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 7,365,499 | $ | 1,457,903 | $ | 292,782 | $ | 9,116,184 | |||||||
Mortgage | 580,166 | 425,584 | 46,705 | 1,052,455 | |||||||||||
Installment | 2,051,587 | 872,034 | 5,364 | 2,928,985 | |||||||||||
Home equity | 998,179 | 268,266 | 89,815 | 1,356,260 | |||||||||||
Credit card | 151,967 | — | — | 151,967 | |||||||||||
Leases | 319,795 | — | — | 319,795 | |||||||||||
Subtotal | 11,467,193 | 3,023,787 | 434,666 | 14,925,646 | |||||||||||
Loss share receivable | — | — | 43,981 | 43,981 | |||||||||||
Total loans | 11,467,193 | 3,023,787 | 478,647 | 14,969,627 | |||||||||||
Allowance for loan losses | (91,950 | ) | (4,977 | ) | (45,109 | ) | (142,036 | ) | |||||||
Net loans | $ | 11,375,243 | $ | 3,018,810 | $ | 433,538 | $ | 14,827,591 | |||||||
As of March 31, 2014 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 7,083,192 | $ | 1,562,878 | $ | 341,267 | $ | 8,987,337 | |||||||
Mortgage | 555,971 | 446,374 | 49,411 | 1,051,756 | |||||||||||
Installment | 1,835,522 | 943,354 | 5,531 | 2,784,407 | |||||||||||
Home equity | 946,802 | 283,309 | 94,828 | 1,324,939 | |||||||||||
Credit card | 147,917 | — | — | 147,917 | |||||||||||
Leases | 257,509 | — | — | 257,509 | |||||||||||
Subtotal | 10,826,913 | 3,235,915 | 491,037 | 14,553,865 | |||||||||||
Loss share receivable | — | — | 54,748 | 54,748 | |||||||||||
Total loans | 10,826,913 | 3,235,915 | 545,785 | 14,608,613 | |||||||||||
Allowance for loan losses | (92,116 | ) | (2,974 | ) | (49,970 | ) | (145,060 | ) | |||||||
Net loans | $ | 10,734,797 | $ | 3,232,941 | $ | 495,815 | $ | 14,463,553 | |||||||
As of December 31, 2013 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | 6,648,279 | $ | 1,725,970 | $ | 375,860 | $ | 8,750,109 | ||||||||
Mortgage | 529,253 | 470,652 | 50,679 | 1,050,584 | |||||||||||
Installment | 1,727,925 | 1,004,569 | 6,162 | 2,738,656 | |||||||||||
Home equity | 920,066 | 294,424 | 97,442 | 1,311,932 | |||||||||||
Credit card | 148,313 | — | — | 148,313 | |||||||||||
Leases | 239,551 | — | — | 239,551 | |||||||||||
Subtotal | 10,213,387 | 3,495,615 | 530,143 | 14,239,145 | |||||||||||
Loss share receivable | — | — | 61,827 | 61,827 | |||||||||||
Total loans | 10,213,387 | 3,495,615 | 591,970 | 14,300,972 | |||||||||||
Allowance for loan losses | (96,484 | ) | (741 | ) | (44,027 | ) | (141,252 | ) | |||||||
Net loans | $ | 10,116,903 | $ | 3,494,874 | $ | 547,943 | $ | 14,159,720 | |||||||
9
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
As of September 30, 2013 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 6,420,369 | $ | 1,963,746 | $ | 422,225 | $ | 8,806,340 | |||||||
Mortgage | 487,283 | 466,594 | 52,796 | 1,006,673 | |||||||||||
Installment | 1,647,095 | 1,080,298 | 6,361 | 2,733,754 | |||||||||||
Home equity | 889,372 | 306,783 | 102,908 | 1,299,063 | |||||||||||
Credit card | 145,113 | — | — | 145,113 | |||||||||||
Leases | 199,907 | — | — | 199,907 | |||||||||||
Subtotal | 9,789,139 | 3,817,421 | 584,290 | 14,190,850 | |||||||||||
Loss share receivable | — | — | 69,986 | 69,986 | |||||||||||
Total loans | 9,789,139 | 3,817,421 | 654,276 | 14,260,836 | |||||||||||
Allowance for loan losses | (98,291 | ) | — | (45,544 | ) | (143,835 | ) | ||||||||
Net loans | $ | 9,690,848 | $ | 3,817,421 | $ | 608,732 | $ | 14,117,001 | |||||||
(1) Loans assumed from Citizens. No allowance was brought forward on the date of acquisition in accordance with business combination accounting. | |||||||||||||||
(2) Loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk. | |||||||||||||||
10
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
AVERAGE CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||
Quarterly Periods | |||||||||||||||||||
(Unaudited) | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
(Dollars in thousands) | 2014 | 2014 | 2014 | 2013 | 2013 | ||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 521,210 | $ | 662,000 | $ | 959,071 | $ | 1,135,601 | $ | 1,415,430 | |||||||||
Investment securities: | |||||||||||||||||||
Held-to-maturity | 3,029,971 | 3,061,711 | 2,983,831 | 2,763,517 | 2,640,807 | ||||||||||||||
Available-for-sale | 3,460,312 | 3,444,830 | 3,332,358 | 3,284,635 | 3,243,173 | ||||||||||||||
Other investments | 148,427 | 148,440 | 168,389 | 253,490 | 267,743 | ||||||||||||||
Loans held for sale | 17,433 | 10,196 | 6,804 | 10,248 | 18,265 | ||||||||||||||
Loans | 15,148,100 | 14,702,319 | 14,412,481 | 14,281,860 | 14,106,837 | ||||||||||||||
Less: allowance for loan losses | 140,026 | 146,368 | 138,891 | 177,628 | 146,509 | ||||||||||||||
Net loans | 15,008,074 | 14,555,951 | 14,273,590 | 14,104,232 | 13,960,328 | ||||||||||||||
Total earning assets | 21,804,243 | 21,367,496 | 20,903,863 | 20,593,750 | 20,276,825 | ||||||||||||||
Premises and equipment, net | 317,366 | 323,175 | 327,845 | 326,632 | 322,236 | ||||||||||||||
Accrued interest receivable and other assets | 2,080,983 | 2,084,973 | 2,092,682 | 2,156,491 | 2,145,612 | ||||||||||||||
TOTAL ASSETS | $ | 24,583,776 | $ | 24,291,276 | $ | 24,144,570 | $ | 24,034,846 | $ | 24,013,594 | |||||||||
LIABILITIES | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Noninterest-bearing | $ | 5,603,104 | $ | 5,515,807 | $ | 5,488,751 | $ | 5,546,316 | $ | 5,443,800 | |||||||||
Interest-bearing | 3,100,904 | 3,066,201 | 3,045,952 | 2,875,375 | 2,720,592 | ||||||||||||||
Savings and money market accounts | 8,492,172 | 8,580,928 | 8,698,817 | 8,544,097 | 8,570,910 | ||||||||||||||
Certificates and other time deposits | 2,335,620 | 2,333,859 | 2,402,986 | 2,551,688 | 2,720,929 | ||||||||||||||
Total deposits | 19,531,800 | 19,496,795 | 19,636,506 | 19,517,476 | 19,456,231 | ||||||||||||||
Federal funds purchased and securities sold under | |||||||||||||||||||
agreements to repurchase | 1,182,507 | 1,024,598 | 884,065 | 948,959 | 1,011,991 | ||||||||||||||
Wholesale borrowings | 438,941 | 373,213 | 276,324 | 200,622 | 201,012 | ||||||||||||||
Long-term debt | 320,387 | 324,431 | 324,428 | 324,426 | 324,424 | ||||||||||||||
Total funds | 21,473,635 | 21,219,037 | 21,121,323 | 20,991,483 | 20,993,658 | ||||||||||||||
Accrued taxes, expenses and other liabilities | 302,255 | 303,887 | 290,021 | 369,728 | 358,390 | ||||||||||||||
Total liabilities | 21,775,890 | 21,522,924 | 21,411,344 | 21,361,211 | 21,352,048 | ||||||||||||||
SHAREHOLDERS' EQUITY | |||||||||||||||||||
Preferred stock | 100,000 | 100,000 | 100,000 | 100,000 | 100,000 | ||||||||||||||
Common stock warrant | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | ||||||||||||||
Common stock | 127,937 | 127,937 | 127,937 | 127,937 | 127,937 | ||||||||||||||
Capital surplus | 1,388,423 | 1,386,497 | 1,391,695 | 1,389,222 | 1,386,931 | ||||||||||||||
Accumulated other comprehensive loss | (41,963 | ) | (44,952 | ) | (52,940 | ) | (79,431 | ) | (82,598 | ) | |||||||||
Retained earnings | 1,352,867 | 1,319,515 | 1,293,379 | 1,262,705 | 1,256,052 | ||||||||||||||
Treasury stock | (122,378 | ) | (123,645 | ) | (129,845 | ) | (129,798 | ) | (129,776 | ) | |||||||||
Total shareholders' equity | 2,807,886 | 2,768,352 | 2,733,226 | 2,673,635 | 2,661,546 | ||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 24,583,776 | $ | 24,291,276 | $ | 24,144,570 | $ | 24,034,846 | $ | 24,013,594 | |||||||||
11
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES Average Loans by Product Type (Unaudited) (Dollars in thousands) | |||||||||||||||
Quarter ended September 30, 2014 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 7,534,848 | $ | 1,373,103 | $ | 271,299 | $ | 9,179,250 | |||||||
Mortgage | 594,258 | 416,417 | 44,672 | 1,055,347 | |||||||||||
Installment | 2,171,246 | 838,687 | 5,278 | 3,015,211 | |||||||||||
Home equity | 1,030,256 | 259,867 | 86,224 | 1,376,347 | |||||||||||
Credit card | 156,866 | — | — | 156,866 | |||||||||||
Leases | 326,840 | — | — | 326,840 | |||||||||||
Subtotal | 11,814,314 | 2,888,074 | 407,473 | 15,109,861 | |||||||||||
Loss share receivable | — | — | 38,239 | 38,239 | |||||||||||
Total loans | 11,814,314 | 2,888,074 | 445,712 | 15,148,100 | |||||||||||
Less allowance for loan losses | 91,888 | 6,088 | 42,050 | 140,026 | |||||||||||
Net loans | $ | 11,722,426 | $ | 2,881,986 | $ | 403,662 | $ | 15,008,074 | |||||||
Quarter ended June 30, 2014 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 7,185,060 | $ | 1,492,139 | $ | 303,721 | $ | 8,980,920 | |||||||
Mortgage | 565,703 | 434,936 | 48,258 | 1,048,897 | |||||||||||
Installment | 1,939,802 | 907,069 | 5,445 | 2,852,316 | |||||||||||
Home equity | 969,592 | 275,387 | 91,855 | 1,336,834 | |||||||||||
Credit card | 149,903 | — | — | 149,903 | |||||||||||
Leases | 282,041 | — | — | 282,041 | |||||||||||
Subtotal | 11,092,101 | 3,109,531 | 449,279 | 14,650,911 | |||||||||||
Loss share receivable | — | — | 51,408 | 51,408 | |||||||||||
Total loans | 11,092,101 | 3,109,531 | 500,687 | 14,702,319 | |||||||||||
Less allowance for loan losses | 94,063 | 3,034 | 49,271 | 146,368 | |||||||||||
Net loans | $ | 10,998,038 | $ | 3,106,497 | $ | 451,416 | $ | 14,555,951 | |||||||
Quarter Ended March 31, 2014 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 6,819,522 | $ | 1,678,267 | $ | 357,033 | $ | 8,854,822 | |||||||
Mortgage | 538,151 | 459,842 | 49,921 | 1,047,914 | |||||||||||
Installment | 1,771,434 | 972,711 | 6,012 | 2,750,157 | |||||||||||
Home equity | 929,362 | 288,529 | 95,487 | 1,313,378 | |||||||||||
Credit card | 147,265 | — | — | 147,265 | |||||||||||
Leases | 242,649 | — | — | 242,649 | |||||||||||
Subtotal | 10,448,383 | 3,399,349 | 508,453 | 14,356,185 | |||||||||||
Loss share receivable | — | — | 56,296 | 56,296 | |||||||||||
Total loans | 10,448,383 | 3,399,349 | 564,749 | 14,412,481 | |||||||||||
Less allowance for loan losses | 96,789 | (617 | ) | 42,719 | 138,891 | ||||||||||
Net loans | $ | 10,351,594 | $ | 3,399,966 | $ | 522,030 | $ | 14,273,590 | |||||||
Quarter Ended December 31, 2013 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 6,526,243 | $ | 1,866,064 | $ | 400,105 | $ | 8,792,412 | |||||||
Mortgage | 509,685 | 472,771 | 51,304 | 1,033,760 | |||||||||||
Installment | 1,697,651 | 1,032,245 | 6,279 | 2,736,175 | |||||||||||
Home equity | 905,172 | 298,212 | 100,712 | 1,304,096 | |||||||||||
Credit card | 146,805 | — | — | 146,805 | |||||||||||
Leases | 203,031 | — | — | 203,031 | |||||||||||
Subtotal | 9,988,587 | 3,669,292 | 558,401 | 14,216,280 | |||||||||||
Loss share receivable | — | — | 65,580 | 65,580 | |||||||||||
Total loans | 9,988,587 | 3,669,292 | 623,981 | 14,281,860 | |||||||||||
Less allowance for loan losses | 134,890 | (2,091 | ) | 44,829 | 177,628 | ||||||||||
Net loans | $ | 9,853,697 | $ | 3,671,383 | $ | 579,152 | $ | 14,104,232 | |||||||
12
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
Quarter ended September 30, 2013 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 6,131,423 | $ | 2,118,803 | $ | 460,242 | $ | 8,710,468 | |||||||
Mortgage | 472,281 | 448,206 | 54,403 | 974,890 | |||||||||||
Installment | 1,570,124 | 1,145,824 | 7,180 | 2,723,128 | |||||||||||
Home equity | 866,001 | 312,681 | 104,762 | 1,283,444 | |||||||||||
Credit card | 143,637 | — | — | 143,637 | |||||||||||
Leases | 194,360 | — | — | 194,360 | |||||||||||
Subtotal | 9,377,826 | 4,025,514 | 626,587 | 14,029,927 | |||||||||||
Loss share receivable | — | — | 76,910 | 76,910 | |||||||||||
Total loans | 9,377,826 | 4,025,514 | 703,497 | 14,106,837 | |||||||||||
Less allowance for loan losses | 97,693 | 68 | 48,748 | 146,509 | |||||||||||
Net loans | $ | 9,280,133 | $ | 4,025,446 | $ | 654,749 | $ | 13,960,328 | |||||||
(1) Loans assumed from Citizens. No allowance was brought forward on the date of acquisition in accordance with business combination accounting. | |||||||||||||||
(2) Loans which are covered by loss sharing agreements with the FDIC providing considerable protection against credit risk. | |||||||||||||||
13
FirstMerit Corporation Reports Third Quarter 2014 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 | ||||||||||||||||||||||||||||||
September 30, 2014 | June 30, 2014 | September 30, 2013 | ||||||||||||||||||||||||||||||
(Unaudited) | Average | Average | Average | Average | Average | Average | ||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Interest (1) | Rate | Balance | Interest (1) | Rate | Balance | Interest (1) | Rate | |||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 521,210 | $ | 662,000 | $ | 1,415,430 | ||||||||||||||||||||||||||
Investment securities and federal funds sold: | ||||||||||||||||||||||||||||||||
U.S. treasury securities and U.S. government agency obligations (taxable) | 5,276,354 | $ | 26,502 | 1.99 | % | 5,303,645 | $ | 26,751 | 2.02 | % | 4,849,135 | $ | 23,551 | 1.93 | % | |||||||||||||||||
Obligations of states and political subdivisions (tax exempt) | 776,376 | 8,734 | 4.46 | % | 767,731 | 8,753 | 4.57 | % | 712,296 | 8,890 | 4.95 | % | ||||||||||||||||||||
Other securities and federal funds sold | 585,980 | 5,571 | 3.77 | % | 583,605 | 5,501 | 3.78 | % | 590,292 | 6,215 | 4.18 | % | ||||||||||||||||||||
Total investment securities and federal funds sold | 6,638,710 | 40,807 | 2.44 | % | 6,654,981 | 41,005 | 2.47 | % | 6,151,723 | 38,656 | 2.49 | % | ||||||||||||||||||||
Loans held for sale | 17,433 | 154 | 3.50 | % | 10,196 | 89 | 3.51 | % | 18,265 | 174 | 3.78 | % | ||||||||||||||||||||
Loans, including loss share receivable (2) | 15,148,100 | 171,302 | 4.49 | % | 14,702,319 | 173,320 | 4.73 | % | 14,106,837 | 182,406 | 5.13 | % | ||||||||||||||||||||
Total earning assets | 21,804,243 | $ | 212,263 | 3.86 | % | 21,367,496 | $ | 214,414 | 4.02 | % | 20,276,825 | $ | 221,236 | 4.33 | % | |||||||||||||||||
Total allowance for loan losses | (140,026 | ) | (146,368 | ) | (146,509 | ) | ||||||||||||||||||||||||||
Other assets | 2,398,349 | 2,408,148 | 2,467,848 | |||||||||||||||||||||||||||||
Total assets | $ | 24,583,776 | $ | 24,291,276 | $ | 24,013,594 | ||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||
Noninterest-bearing | $ | 5,603,104 | $ | — | — | % | $ | 5,515,807 | $ | — | — | % | $ | 5,443,800 | $ | — | — | % | ||||||||||||||
Interest-bearing | 3,100,904 | 755 | 0.10 | % | 3,066,201 | 745 | 0.10 | % | 2,720,592 | 809 | 0.12 | % | ||||||||||||||||||||
Savings and money market accounts | 8,492,172 | 5,570 | 0.26 | % | 8,580,928 | 5,477 | 0.26 | % | 8,570,910 | 6,495 | 0.30 | % | ||||||||||||||||||||
Certificates and other time deposits | 2,335,620 | 2,846 | 0.48 | % | 2,333,859 | 3,009 | 0.52 | % | 2,720,929 | 1,712 | 0.25 | % | ||||||||||||||||||||
Total deposits | 19,531,800 | 9,171 | 0.19 | % | 19,496,795 | 9,231 | 0.19 | % | 19,456,231 | 9,016 | 0.18 | % | ||||||||||||||||||||
Securities sold under agreements to repurchase | 1,182,507 | 268 | 0.09 | % | 1,024,598 | 233 | 0.09 | % | 1,011,991 | 306 | 0.12 | % | ||||||||||||||||||||
Wholesale borrowings | 438,941 | 1,397 | 1.26 | % | 373,213 | 1,391 | 1.49 | % | 201,012 | 936 | 1.85 | % | ||||||||||||||||||||
Long-term debt | 320,387 | 3,783 | 4.68 | % | 324,431 | 3,893 | 4.81 | % | 324,424 | 3,899 | 4.77 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 15,870,531 | 14,619 | 0.37 | % | 15,703,230 | 14,748 | 0.38 | % | 15,549,858 | 14,157 | 0.36 | % | ||||||||||||||||||||
Other liabilities | 302,255 | 303,887 | 358,390 | |||||||||||||||||||||||||||||
Shareholders' equity | 2,807,886 | 2,768,352 | 2,661,546 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 24,583,776 | $ | 24,291,276 | $ | 24,013,594 | ||||||||||||||||||||||||||
Net yield on earning assets | $ | 21,804,243 | $ | 197,644 | 3.60 | % | $ | 21,367,496 | $ | 199,666 | 3.75 | % | $ | 20,276,825 | $ | 207,079 | 4.05 | % | ||||||||||||||
Interest rate spread | 3.50 | % | 3.65 | % | 3.97 | % | ||||||||||||||||||||||||||
(1) The net yield on earning assets is calculated as annualized taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal and/or state income taxes. As such, these tax-exempt securities typically yield lower returns than taxable securities. To provide more meaningful comparisons of net interest margins for all earning assets, net interest income on a taxable-equivalent basis is used in calculating net interest margin by increasing the interest earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under generally accepted accounting principles in the Consolidated Statements of Income. The taxable-equivalent adjustments to net interest income were $4.1 million, $4.1 million and $3.7 million for the three months ended September 30, 2014, June 30, 2014 and September 30, 2013, respectively.
(2) Nonaccrual loans have been included in the average balances.
14
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBIDARIES | |||||||||||||||||||||
AVERAGE CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||
Fully Tax-equivalent Interest Rates and Interest Differential | |||||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||||||||||||
(Unaudited) | Average | Average | Average | Average | |||||||||||||||||
(Dollars in thousands) | Balance | Interest (1) | Rate | Balance | Interest (1) | Rate | |||||||||||||||
ASSETS | |||||||||||||||||||||
Cash and cash equivalents | $ | 712,490 | $ | 875,890 | |||||||||||||||||
Investment securities and federal funds sold: | |||||||||||||||||||||
U.S. treasury securities and U.S. government agency obligations (taxable) | 5,244,238 | $ | 79,162 | 2.02 | % | 4,125,541 | $ | 64,525 | 2.09 | % | |||||||||||
Obligations of states and political subdivisions (tax exempt) | 761,461 | 26,100 | 4.58 | % | 655,257 | 24,702 | 5.04 | % | |||||||||||||
Other securities and federal funds sold | 587,622 | 17,185 | 3.91 | % | 488,005 | 13,618 | 3.73 | % | |||||||||||||
Total investment securities and federal funds sold | 6,593,321 | 122,447 | 2.48 | % | 5,268,803 | 102,845 | 2.61 | % | |||||||||||||
Loans held for sale | 11,517 | 302 | 3.51 | % | 16,860 | 461 | 3.66 | % | |||||||||||||
Loans, including loss share receivable (2) | 14,756,994 | 515,757 | 4.67 | % | 12,504,632 | 460,257 | 4.92 | % | |||||||||||||
Total earning assets | 21,361,832 | 638,506 | 4.00 | % | 17,790,295 | 563,563 | 4.24 | % | |||||||||||||
Total allowance for loan losses | (141,766 | ) | (144,954 | ) | |||||||||||||||||
Other assets | 2,405,097 | 2,111,427 | |||||||||||||||||||
Total assets | $ | 24,337,653 | $ | 20,632,658 | |||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Noninterest-bearing | $ | 5,536,306 | — | — | % | $ | 4,628,252 | — | —% | ||||||||||||
Interest-bearing | 3,071,220 | 2,236 | 0.10 | % | 2,128,055 | 1,784 | 0.11 | % | |||||||||||||
Savings and money market accounts | 8,589,882 | 16,605 | 0.26 | % | 7,549,165 | 18,279 | 0.32 | % | |||||||||||||
Certificates and other time deposits | 2,357,241 | 8,319 | 0.47 | % | 2,249,362 | 7,149 | 0.42 | % | |||||||||||||
Total deposits | 19,554,649 | 27,160 | 0.19 | % | 16,554,834 | 27,212 | 0.22 | % | |||||||||||||
Securities sold under agreements to repurchase | 1,031,483 | 697 | 0.09 | % | 949,105 | 949 | 0.13 | % | |||||||||||||
Wholesale borrowings | 363,422 | 3,917 | 1.44 | % | 191,970 | 2,955 | 2.06 | % | |||||||||||||
Long-term debt | 323,068 | 11,566 | 4.79 | % | 265,461 | 9,390 | 4.73 | % | |||||||||||||
Total interest-bearing liabilities | 15,736,316 | 43,340 | 0.37 | % | 13,333,118 | 40,506 | 0.41 | % | |||||||||||||
Other liabilities | 294,936 | 351,650 | |||||||||||||||||||
Shareholders' equity | 2,770,095 | 2,319,638 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 24,337,653 | $ | 20,632,658 | |||||||||||||||||
Net yield on earning assets | $ | 21,361,832 | $ | 595,166 | 3.73 | % | $ | 17,790,295 | $ | 523,057 | 3.93 | % | |||||||||
Interest rate spread | 3.63 | % | 3.83 | % | |||||||||||||||||
(1) The net yield on earning assets is calculated as annualized taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal and/or state income taxes. As such, these tax-exempt securities typically yield lower returns than taxable securities. To provide more meaningful comparisons of net interest margins for all earning assets, net interest income on a taxable-equivalent basis is used in calculating net interest margin by increasing the interest earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under generally accepted accounting principles in the Consolidated Statements of Income. The taxable-equivalent adjustments to net interest income were $12.1 million and $10.3 million for the nine months ended September 30, 2014 and September 30, 2013, respectively.
(2) Nonaccrual loans have been included in the average balances.
15
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES | ||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||
(Unaudited) | Quarters Ended | Nine Months Ended | ||||||||||||||||
(Dollars in thousands except per share data) | September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Interest income: | ||||||||||||||||||
Loans and loans held for sale | $ | 170,648 | $ | 182,107 | $ | 513,678 | $ | 459,313 | ||||||||||
Investment securities: | ||||||||||||||||||
Taxable | 32,072 | 29,766 | 96,347 | 78,143 | ||||||||||||||
Tax-exempt | 5,477 | 5,624 | 16,372 | 15,767 | ||||||||||||||
Total investment securities interest | 37,549 | 35,390 | 112,719 | 93,910 | ||||||||||||||
Total interest income | 208,197 | 217,497 | 626,397 | 553,223 | ||||||||||||||
Interest expense: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Interest-bearing | 755 | 809 | 2,236 | 1,784 | ||||||||||||||
Savings and money market accounts | 5,570 | 6,495 | 16,605 | 18,279 | ||||||||||||||
Certificates and other time deposits | 2,846 | 1,712 | 8,319 | 7,149 | ||||||||||||||
Securities sold under agreements to repurchase | 268 | 306 | 697 | 949 | ||||||||||||||
Wholesale borrowings | 1,397 | 936 | 3,917 | 2,955 | ||||||||||||||
Long-term debt | 3,783 | 3,899 | 11,566 | 9,390 | ||||||||||||||
Total interest expense | 14,619 | 14,157 | 43,340 | 40,506 | ||||||||||||||
Net interest income | 193,578 | 203,340 | 583,057 | 512,717 | ||||||||||||||
Provision for loan losses | 9,192 | 6,379 | 38,982 | 23,634 | ||||||||||||||
Net interest income after provision for loan losses | 184,386 | 196,961 | 544,075 | 489,083 | ||||||||||||||
Noninterest income: | ||||||||||||||||||
Trust department income | 10,300 | 9,608 | 30,118 | 24,515 | ||||||||||||||
Service charges on deposits | 18,684 | 22,146 | 53,860 | 55,315 | ||||||||||||||
Credit card fees | 13,754 | 13,588 | 39,361 | 38,128 | ||||||||||||||
ATM and other service fees | 6,182 | 5,216 | 17,998 | 13,496 | ||||||||||||||
Bank owned life insurance income | 4,218 | 4,351 | 11,840 | 12,889 | ||||||||||||||
Investment services and insurance | 3,606 | 3,403 | 10,974 | 9,247 | ||||||||||||||
Investment securities gains/(losses), net | 14 | — | 150 | (2,803 | ) | |||||||||||||
Loan sales and servicing income | 4,740 | 3,644 | 12,932 | 19,492 | ||||||||||||||
Other operating income | 8,235 | 9,134 | 32,331 | 27,644 | ||||||||||||||
Total noninterest income | 69,733 | 71,090 | 209,564 | 197,923 | ||||||||||||||
Noninterest expenses: | ||||||||||||||||||
Salaries, wages, pension and employee benefits | 90,593 | 97,390 | 269,071 | 260,395 | ||||||||||||||
Net occupancy expense | 13,887 | 13,816 | 45,248 | 35,444 | ||||||||||||||
Equipment expense | 12,188 | 11,040 | 36,366 | 28,698 | ||||||||||||||
Stationery, supplies and postage | 3,723 | 3,801 | 11,820 | 9,304 | ||||||||||||||
Bankcard, loan processing and other costs | 11,151 | 40,786 | 33,795 | 61,043 | ||||||||||||||
Professional services | 5,270 | 9,768 | 15,373 | 32,322 | ||||||||||||||
Amortization of intangibles | 2,933 | 2,972 | 8,802 | 5,700 | ||||||||||||||
FDIC insurance expense | 2,988 | 4,925 | 14,492 | 12,601 | ||||||||||||||
Other operating expense | 20,412 | 26,101 | 64,911 | 60,126 | ||||||||||||||
Total noninterest expenses | 163,145 | 210,599 | 499,878 | 505,633 | ||||||||||||||
Income before income tax expense | 90,974 | 57,452 | 253,761 | 181,373 | ||||||||||||||
Income tax expense | 27,076 | 16,737 | 76,889 | 54,863 | ||||||||||||||
Net income | $ | 63,898 | $ | 40,715 | $ | 176,872 | $ | 126,510 | ||||||||||
Less: | Net income allocated to participating shareholders | 519 | 310 | 1,433 | 1,102 | |||||||||||||
Preferred stock dividends | 1,469 | 1,469 | 4,407 | 3,868 | ||||||||||||||
Net income attributable to common shareholders | $ | 61,910 | $ | 38,936 | $ | 171,032 | $ | 121,540 | ||||||||||
Net income used in diluted EPS calculation | $ | 61,910 | $ | 38,936 | $ | 171,032 | $ | 121,540 | ||||||||||
Weighted average number of common shares outstanding - basic | 165,389 | 165,044 | 165,263 | 144,402 | ||||||||||||||
Weighted average number of common shares outstanding - diluted | 165,804 | 165,874 | 165,916 | 147,392 | ||||||||||||||
Basic earnings per common share | $ | 0.37 | $ | 0.24 | $ | 1.03 | $ | 0.84 | ||||||||||
Diluted earnings per common share | $ | 0.37 | $ | 0.23 | $ | 1.03 | $ | 0.82 | ||||||||||
Dividend per common share | $ | 0.16 | $ | 0.16 | $ | 0.48 | $ | 0.48 | ||||||||||
16
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||||||||||
(Unaudited) | Quarter Ended | Nine Months Ended | |||||||||||||||||||||
(Dollars in thousands) | September 30, 2014 | September 30, 2014 | |||||||||||||||||||||
Pretax | Tax | After tax | Pretax | Tax | After tax | ||||||||||||||||||
Net Income | $ | 90,974 | $ | 27,076 | $ | 63,898 | $ | 253,761 | $ | 76,889 | $ | 176,872 | |||||||||||
Other comprehensive income/(loss) | |||||||||||||||||||||||
Unrealized gains and losses on securities available for sale: | |||||||||||||||||||||||
Changes in unrealized securities' holding gains/(losses) | (16,207 | ) | (5,672 | ) | (10,535 | ) | 24,293 | 8,503 | 15,790 | ||||||||||||||
Changes in unrealized securities' holding gains/(losses) that result from securities being transferred into available-for-sale from held-to-maturity | (563 | ) | (197 | ) | (366 | ) | (1,551 | ) | (543 | ) | (1,008 | ) | |||||||||||
Net losses/(gains) realized on sale of securities reclassified to noninterest income | (14 | ) | (5 | ) | (9 | ) | (150 | ) | (53 | ) | (97 | ) | |||||||||||
Net change in unrealized gains/(losses) on securities available for sale | (16,784 | ) | (5,874 | ) | (10,910 | ) | 22,592 | 7,907 | 14,685 | ||||||||||||||
Pension plans and other postretirement benefits: | |||||||||||||||||||||||
Net gains/(losses) arising during the period | — | — | — | — | — | — | |||||||||||||||||
Amortization of actuarial gain | 767 | 268 | 499 | 2,398 | 839 | 1,559 | |||||||||||||||||
Amortization of prior service cost reclassified to other noninterest expense | 516 | 181 | 335 | 1,614 | 565 | 1,049 | |||||||||||||||||
Net change from defined benefit pension plans | 1,283 | 449 | 834 | 4,012 | 1,404 | 2,608 | |||||||||||||||||
Total other comprehensive gains/(losses) | (15,501 | ) | (5,425 | ) | (10,076 | ) | 26,604 | 9,311 | 17,293 | ||||||||||||||
Comprehensive income | $ | 75,473 | $ | 21,651 | $ | 53,822 | $ | 280,365 | $ | 86,200 | $ | 194,165 | |||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, 2013 | September 30, 2013 | ||||||||||||||||||||||
Pretax | Tax | After tax | Pretax | Tax | After tax | ||||||||||||||||||
Net Income | $ | 57,452 | $ | 16,737 | $ | 40,715 | $ | 181,373 | $ | 54,863 | $ | 126,510 | |||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Unrealized gains and losses on securities available for sale: | |||||||||||||||||||||||
Changes in unrealized securities' holding gains/(losses) | (17,491 | ) | (6,123 | ) | (11,368 | ) | (104,853 | ) | (36,699 | ) | (68,154 | ) | |||||||||||
Changes in unrealized securities' holding gains/(losses) that result from securities being transferred into available-for-sale from held-to-maturity | (534 | ) | (187 | ) | (347 | ) | (1,654 | ) | (579 | ) | (1,075 | ) | |||||||||||
Net losses/(gains) realized on sale of securities reclassified to noninterest income | (1 | ) | — | (1 | ) | 2,802 | 981 | 1,821 | |||||||||||||||
Net change in unrealized gains/(losses) on securities available for sale | (18,026 | ) | (6,310 | ) | (11,716 | ) | (103,705 | ) | (36,297 | ) | (67,408 | ) | |||||||||||
Pension plans and other postretirement benefits: | |||||||||||||||||||||||
Net gains/(losses) arising during the period | — | — | — | — | — | — | |||||||||||||||||
Amortization of actuarial gain | — | — | — | — | — | — | |||||||||||||||||
Amortization of prior service cost reclassified to other noninterest expense | — | — | — | — | — | — | |||||||||||||||||
Net change from defined benefit pension plans | — | — | — | — | — | — | |||||||||||||||||
Total other comprehensive gains/(losses) | (18,026 | ) | (6,310 | ) | (11,716 | ) | (103,705 | ) | (36,297 | ) | (67,408 | ) | |||||||||||
Comprehensive income | $ | 39,426 | $ | 10,427 | $ | 28,999 | $ | 77,668 | $ | 18,566 | $ | 59,102 | |||||||||||
17
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME---LINKED QUARTERS | |||||||||||||||||||
Quarterly Results | |||||||||||||||||||
(Unaudited) | 2014 | 2014 | 2014 | 2013 | 2013 | ||||||||||||||
(Dollars in thousands, except share data) | 3rd qtr | 2nd qtr | 1st qtr | 4th qtr | 3rd qtr | ||||||||||||||
Loans and loans held for sale | $ | 170,648 | $ | 172,517 | $ | 170,514 | $ | 176,559 | $ | 182,107 | |||||||||
Investment securities | 37,549 | 37,808 | 37,362 | 36,021 | 35,390 | ||||||||||||||
Total interest income | 208,197 | 210,325 | 207,876 | 212,580 | 217,497 | ||||||||||||||
Interest expense | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Interest-bearing | 755 | 745 | 737 | 759 | 809 | ||||||||||||||
Savings and money market accounts | 5,570 | 5,477 | 5,559 | 6,127 | 6,495 | ||||||||||||||
Certificates and other time deposits | 2,846 | 3,009 | 2,464 | 2,500 | 1,712 | ||||||||||||||
Securities sold under agreements to repurchase | 268 | 233 | 197 | 291 | 306 | ||||||||||||||
Wholesale borrowings | 1,397 | 1,391 | 1,129 | 938 | 936 | ||||||||||||||
Long-term debt | 3,783 | 3,893 | 3,890 | 3,897 | 3,899 | ||||||||||||||
Total interest expense | 14,619 | 14,748 | 13,976 | 14,512 | 14,157 | ||||||||||||||
Net interest income | 193,578 | 195,577 | 193,900 | 198,068 | 203,340 | ||||||||||||||
Provision for loan losses | 9,192 | 15,253 | 14,536 | 10,050 | 6,379 | ||||||||||||||
Net interest income after provision for loan losses | 184,386 | 180,324 | 179,364 | 188,018 | 196,961 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Trust department income | 10,300 | 10,070 | 9,748 | 10,255 | 9,608 | ||||||||||||||
Service charges on deposits | 18,684 | 18,528 | 16,648 | 19,084 | 22,146 | ||||||||||||||
Credit card fees | 13,754 | 13,455 | 12,152 | 12,414 | 13,588 | ||||||||||||||
ATM and other service fees | 6,182 | 5,996 | 5,819 | 5,659 | 5,216 | ||||||||||||||
Bank owned life insurance income | 4,218 | 4,040 | 3,582 | 4,037 | 4,351 | ||||||||||||||
Investment services and insurance | 3,606 | 3,852 | 3,516 | 3,530 | 3,403 | ||||||||||||||
Investment securities gains/(losses), net | 14 | 80 | 56 | — | — | ||||||||||||||
Loan sales and servicing income | 4,740 | 4,462 | 3,730 | 3,577 | 3,644 | ||||||||||||||
Other operating income | 8,235 | 12,077 | 12,019 | 13,864 | 9,134 | ||||||||||||||
Total noninterest income | 69,733 | 72,560 | 67,270 | 72,420 | 71,090 | ||||||||||||||
Noninterest expenses: | |||||||||||||||||||
Salaries, wages, pension and employee benefits | 90,593 | 89,465 | 89,013 | 93,621 | 97,390 | ||||||||||||||
Net occupancy expense | 13,887 | 14,347 | 17,014 | 14,066 | 13,816 | ||||||||||||||
Equipment expense | 12,188 | 12,267 | 11,911 | 13,177 | 11,040 | ||||||||||||||
Stationery, supplies and postage | 3,723 | 3,990 | 4,108 | 4,895 | 3,801 | ||||||||||||||
Bankcard, loan processing and other costs | 11,151 | 11,810 | 10,834 | 10,886 | 40,786 | ||||||||||||||
Professional services | 5,270 | 4,745 | 5,359 | 8,358 | 9,768 | ||||||||||||||
Amortization of intangibles | 2,933 | 2,933 | 2,936 | 2,692 | 2,972 | ||||||||||||||
FDIC insurance expense | 2,988 | 5,533 | 5,971 | 5,106 | 4,925 | ||||||||||||||
Other operating expense | 20,412 | 22,310 | 22,185 | 25,819 | 26,101 | ||||||||||||||
Total noninterest expenses | 163,145 | 167,400 | 169,331 | 178,620 | 210,599 | ||||||||||||||
Income before income tax expense | 90,974 | 85,484 | 77,303 | 81,818 | 57,452 | ||||||||||||||
Income tax expense | 27,076 | 25,965 | 23,848 | 24,644 | 16,737 | ||||||||||||||
Net income | 63,898 | 59,519 | 53,455 | 57,174 | 40,715 | ||||||||||||||
Less: Income allocated to participating shareholders | 519 | 489 | 380 | 441 | 310 | ||||||||||||||
Preferred stock dividends | 1,469 | 1,469 | 1,469 | 1,469 | 1,469 | ||||||||||||||
Net income attributable to common shareholders | $ | 61,910 | $ | 57,561 | $ | 51,606 | $ | 55,264 | $ | 38,936 | |||||||||
Net income used in diluted EPS calculation | $ | 61,910 | $ | 57,561 | $ | 51,606 | $ | 55,264 | $ | 38,936 | |||||||||
Weighted-average number of common shares outstanding - basic | 165,389 | 165,335 | 165,060 | 165,054 | 165,044 | ||||||||||||||
Weighted-average number of common shares outstanding- diluted | 165,804 | 166,147 | 166,004 | 166,097 | 165,874 | ||||||||||||||
Basic earnings per common share | $ | 0.37 | $ | 0.35 | $ | 0.31 | $ | 0.33 | $ | 0.24 | |||||||||
Diluted earnings per common share | $ | 0.37 | $ | 0.35 | $ | 0.31 | $ | 0.33 | $ | 0.23 | |||||||||
18
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||
ASSET QUALITY INFORMATION (excluding acquired loans and covered assets) (a) | |||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Audited) | |||||||||||||||||||||
(Dollars in thousands, except ratios) | Quarterly Periods | Annual Period | |||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | December 31, | ||||||||||||||||||
Allowance for Credit Losses | 2014 | 2014 | 2014 | 2013 | 2013 | 2013 | |||||||||||||||||
Allowance for originated loan losses, beginning of period | $ | 91,950 | $ | 92,116 | $ | 96,484 | $ | 98,291 | $ | 98,645 | $ | 98,942 | |||||||||||
Provision for originated loan losses | 4,862 | 5,993 | 3,654 | 1,552 | 2,523 | 13,034 | |||||||||||||||||
Charge-offs | 11,410 | 11,148 | 13,160 | 9,913 | 8,515 | 40,173 | |||||||||||||||||
Recoveries | 5,481 | 4,989 | 5,138 | 6,554 | 5,638 | 24,681 | |||||||||||||||||
Net charge-offs | 5,929 | 6,159 | 8,022 | 3,359 | 2,877 | 15,492 | |||||||||||||||||
Allowance for originated loan losses, end of period | $ | 90,883 | $ | 91,950 | $ | 92,116 | $ | 96,484 | $ | 98,291 | $ | 96,484 | |||||||||||
Reserve for unfunded lending commitments, | |||||||||||||||||||||||
beginning of period | $ | 7,107 | $ | 7,481 | $ | 7,907 | $ | 8,493 | $ | 8,114 | $ | 5,433 | |||||||||||
Provision for (relief of) credit losses | (141 | ) | (374 | ) | (426 | ) | (586 | ) | 379 | 2,474 | |||||||||||||
Reserve for unfunded lending commitments, | |||||||||||||||||||||||
end of period | $ | 6,966 | $ | 7,107 | $ | 7,481 | $ | 7,907 | $ | 8,493 | $ | 7,907 | |||||||||||
Allowance for Credit Losses | $ | 97,849 | $ | 99,057 | $ | 99,597 | $ | 104,391 | $ | 106,784 | $ | 104,391 | |||||||||||
Ratios | |||||||||||||||||||||||
Provision for loan losses to average loans | 0.16 | % | 0.22 | % | 0.14 | % | 0.06 | % | 0.11 | % | 0.14 | % | |||||||||||
Net charge-offs to average loans | 0.20 | % | 0.22 | % | 0.31 | % | 0.13 | % | 0.12 | % | 0.17 | % | |||||||||||
Allowance for loan losses to period-end loans | 0.75 | % | 0.80 | % | 0.85 | % | 0.94 | % | 1.00 | % | 0.94 | % | |||||||||||
Allowance for credit losses to period-end loans | 0.81 | % | 0.86 | % | 0.92 | % | 1.02 | % | 1.09 | % | 1.02 | % | |||||||||||
Allowance for loan losses to nonperforming loans | 231.13 | % | 250.27 | % | 212.01 | % | 228.62 | % | 276.19 | % | 228.62 | % | |||||||||||
Allowance for credit losses to nonperforming loans | 248.85 | % | 269.61 | % | 229.23 | % | 247.35 | % | 300.06 | % | 247.35 | % | |||||||||||
Asset Quality | |||||||||||||||||||||||
Impaired originated loans: | |||||||||||||||||||||||
Nonaccrual | $ | 22,347 | $ | 21,072 | $ | 27,122 | $ | 25,674 | $ | 19,140 | $ | 25,674 | |||||||||||
Other nonperforming loans: | |||||||||||||||||||||||
Nonaccrual | 16,974 | 15,669 | 16,326 | 16,529 | 16,448 | 16,529 | |||||||||||||||||
Total nonperforming loans | 39,321 | 36,741 | 43,448 | 42,203 | 35,588 | 42,203 | |||||||||||||||||
Other real estate ("ORE") | 23,798 | 24,181 | 19,263 | 18,680 | 19,838 | 18,680 | |||||||||||||||||
Total nonperforming assets ("NPAs") | $ | 63,119 | $ | 60,922 | $ | 62,711 | $ | 60,883 | $ | 55,426 | $ | 60,883 | |||||||||||
NPAs to period-end loans + ORE | 0.52 | % | 0.53 | % | 0.58 | % | 0.60 | % | 0.57 | % | 0.60 | % | |||||||||||
Accruing originated loans past due 90 days or more | $ | 8,538 | $ | 15,643 | $ | 11,860 | $ | 11,176 | $ | 12,452 | $ | 11,176 | |||||||||||
(a) Due to the impact of business combination accounting and protection of FDIC loss sharing agreements, which provide considerable protection against credit risk, acquired and covered loans are excluded from this table to provide for improved comparability to prior periods and better perspective into asset quality trends. | |||||||||||||||||||||||
19
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
NONINTEREST INCOME AND NONINTEREST EXPENSE DETAIL | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
2014 | 2014 | 2014 | 2013 | 2013 | ||||||||||||||||
QUARTERLY NONINTEREST INCOME DETAIL | 3rd qtr | 2nd qtr | 1st qtr | 4th qtr | 3rd qtr | |||||||||||||||
Trust department income | $ | 10,300 | $ | 10,070 | $ | 9,748 | $ | 10,255 | $ | 9,608 | ||||||||||
Service charges on deposits | 18,684 | 18,528 | 16,648 | 19,084 | 22,146 | |||||||||||||||
Credit card fees | 13,754 | 13,455 | 12,152 | 12,414 | 13,588 | |||||||||||||||
ATM and other service fees | 6,182 | 5,996 | 5,819 | 5,659 | 5,216 | |||||||||||||||
Bank owned life insurance income | 4,218 | 4,040 | 3,582 | 4,037 | 4,351 | |||||||||||||||
Investment services and insurance | 3,606 | 3,852 | 3,516 | 3,530 | 3,403 | |||||||||||||||
Investment securities gains/(losses), net | 14 | 80 | 56 | — | — | |||||||||||||||
Loan sales and servicing income | 4,740 | 4,462 | 3,730 | 3,577 | 3,644 | |||||||||||||||
Other operating income | 8,235 | 12,077 | 12,019 | 13,864 | 9,134 | |||||||||||||||
Total Noninterest Income | $ | 69,733 | $ | 72,560 | $ | 67,270 | $ | 72,420 | $ | 71,090 | ||||||||||
2014 | 2014 | 2014 | 2013 | 2013 | ||||||||||||||||
QUARTERLY NONINTEREST EXPENSE DETAIL | 3rd qtr | 2nd qtr | 1st qtr | 4th qtr | 3rd qtr | |||||||||||||||
Salaries and wages | $ | 71,769 | $ | 69,892 | $ | 71,669 | $ | 76,685 | $ | 79,369 | ||||||||||
Pension and employee benefits | 18,824 | 19,573 | 17,344 | 16,936 | 18,021 | |||||||||||||||
Net occupancy expense | 13,887 | 14,347 | 17,014 | 14,066 | 13,816 | |||||||||||||||
Equipment expense | 12,188 | 12,267 | 11,911 | 13,177 | 11,040 | |||||||||||||||
Taxes, other than federal income taxes | 1,286 | 2,576 | 2,774 | 2,618 | 2,785 | |||||||||||||||
Stationery, supplies and postage | 3,723 | 3,990 | 4,108 | 4,895 | 3,801 | |||||||||||||||
Bankcard, loan processing and other costs | 11,151 | 11,810 | 10,834 | 10,886 | 40,786 | |||||||||||||||
Advertising | 3,942 | 3,801 | 3,516 | 4,855 | 4,432 | |||||||||||||||
Professional services | 5,270 | 4,745 | 5,359 | 8,358 | 9,768 | |||||||||||||||
Telephone | 2,831 | 2,857 | 2,908 | 3,427 | 3,326 | |||||||||||||||
Amortization of intangibles | 2,933 | 2,933 | 2,936 | 2,692 | 2,972 | |||||||||||||||
FDIC insurance expense | 2,988 | 5,533 | 5,971 | 5,106 | 4,925 | |||||||||||||||
Other operating expense | 12,353 | 13,076 | 12,987 | 14,919 | 15,558 | |||||||||||||||
Total Noninterest Expense | $ | 163,145 | $ | 167,400 | $ | 169,331 | $ | 178,620 | $ | 210,599 | ||||||||||
20
FirstMerit Corporation Reports Third Quarter 2014 EPS Results
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
ALLOWANCE FOR ORIGINATED LOAN LOSSES - Net Charge-off Detail (excluding acquired and covered loans) (a) | |||||||||||||||||||
(Unaudited) | Quarters Ended | Nine Months Ended | Year Ended | ||||||||||||||||
(Dollars in thousands, except ratios) | September 30, | September 30, | December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2013 | |||||||||||||||
Allowance for originated loan losses - beginning of period | $ | 91,950 | $ | 98,645 | $ | 96,484 | $ | 98,942 | $ | 98,942 | |||||||||
Loans charged off: | |||||||||||||||||||
Commercial | 4,046 | 1,222 | 12,256 | 6,644 | 7,637 | ||||||||||||||
Mortgage | 91 | 501 | 1,484 | 1,185 | 1,903 | ||||||||||||||
Installment | 4,323 | 3,582 | 12,983 | 11,788 | 16,683 | ||||||||||||||
Home equity | 1,361 | 1,396 | 3,403 | 3,835 | 5,036 | ||||||||||||||
Credit cards | 778 | 1,367 | 3,544 | 4,229 | 5,541 | ||||||||||||||
Leases | — | — | — | 1,237 | 1,237 | ||||||||||||||
Overdrafts | 811 | 447 | 2,048 | 1,342 | 2,136 | ||||||||||||||
Total | 11,410 | 8,515 | 35,718 | 30,260 | 40,173 | ||||||||||||||
Recoveries: | |||||||||||||||||||
Commercial | 1,287 | 1,724 | 2,720 | 6,731 | 9,012 | ||||||||||||||
Mortgage | 114 | 39 | 219 | 133 | 230 | ||||||||||||||
Installment | 2,729 | 2,613 | 8,195 | 7,810 | 10,459 | ||||||||||||||
Home equity | 708 | 704 | 2,227 | 1,537 | 2,492 | ||||||||||||||
Credit cards | 403 | 438 | 1,260 | 1,420 | 1,841 | ||||||||||||||
Manufactured housing | 54 | 11 | 78 | 49 | 60 | ||||||||||||||
Leases | 2 | 11 | 374 | 100 | 100 | ||||||||||||||
Overdrafts | 184 | 98 | 535 | 347 | 487 | ||||||||||||||
Total | 5,481 | 5,638 | 15,608 | 18,127 | 24,681 | ||||||||||||||
Net charge-offs | 5,929 | 2,877 | 20,110 | 12,133 | 15,492 | ||||||||||||||
Provision for originated loan losses | 4,862 | 2,523 | 14,509 | 11,482 | 13,034 | ||||||||||||||
Allowance for originated loan losses-end of period | $ | 90,883 | $ | 98,291 | $ | 90,883 | $ | 98,291 | $ | 96,484 | |||||||||
Average originated loans | $ | 11,814,314 | $ | 9,377,826 | $ | 11,123,269 | $ | 8,999,316 | $ | 9,252,555 | |||||||||
Ratio (annualized) to average originated loans: | |||||||||||||||||||
Originated net charge-offs | 0.20 | % | 0.12 | % | 0.24 | % | 0.18 | % | 0.17 | % | |||||||||
Provision for originated loan losses | 0.16 | % | 0.11 | % | 0.17 | % | 0.17 | % | 0.14 | % | |||||||||
Originated Loans, period-end | $ | 12,071,759 | $ | 9,789,139 | $ | 12,071,759 | $ | 9,789,139 | $ | 10,213,387 | |||||||||
Allowance for credit losses: | $ | 97,849 | $ | 106,784 | $ | 97,849 | $ | 106,784 | $ | 104,391 | |||||||||
To (annualized) net charge-offs | 4.16 | 9.36 | 3.64 | 6.58 | 6.74 | ||||||||||||||
Allowance for originated loan losses: | |||||||||||||||||||
To period-end originated loans | 0.75 | % | 1.00 | % | 0.75 | % | 1.00 | % | 0.94 | % | |||||||||
To (annualized) net originated charge-offs | 3.86 | 8.61 | 3.38 | 6.06 | 6.23 | ||||||||||||||
(a) Due to the impact of business combination accounting and protection of FDIC loss sharing agreements, which provide considerable protection against credit risk, acquired and covered loans are excluded from this table to provide for improved comparability to prior periods and better perspective into asset quality trends. | |||||||||||||||||||
21