FirstMerit Reports Third Quarter 2015 EPS of $0.34 Per Share
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AKRON, Ohio, Oct. 27, 2015 /PRNewswire/ --
Quarterly Highlights include:
- Profitability Sustained: 66th consecutive quarter of profitability.
- Loan growth continued: Total loan growth of $94.2 million, or 0.60% from the prior quarter.
- Credit quality remained solid: Net charge-offs to average originated loans of 0.24%.
- Balance sheet remained strong: Strong tangible common equity ratio1 at 8.31%.
FirstMerit Corporation (Nasdaq: FMER) (the "Corporation") reported third quarter 2015 net income of $59.0 million, or $0.34 per diluted share. This compares with $56.6 million, or $0.33 per diluted share, for the second quarter 2015 and $63.9 million, or $0.37 per diluted share, for the third quarter 2014.
"FirstMerit's third quarter financial performance reflects success in our strategic focus on profitable organic growth across our markets. This past quarter we increased both our originated commercial and consumer loan portfolios while maintaining disciplined credit management. We also lowered expenses over the prior quarter and improved our efficiency ratio. Additionally, our solid results this past quarter supported a 6.25% increase in the quarterly dividend, which we announced in August," said Paul Greig, Chairman, President and CEO of FirstMerit Corporation.
|
1 - See Non-GAAP Financial Measures section of this release for a reconciliation to financial measures as defined by GAAP. |
Earnings Summary
|
Change 3Q 2015 vs. | |||||||||||||
|
2015 |
2015 |
2014 |
2015 |
2014 | |||||||||
|
(Dollars in thousands, except per share amounts) |
3rd qtr |
2nd qtr |
3rd qtr |
2nd qtr |
3rd qtr | ||||||||
|
Net interest income TE 1 |
$ |
189,119 |
$ |
189,018 |
$ |
197,644 |
0.05 |
% |
(4.31) |
% | |||
|
Diluted earnings per common share |
0.34 |
0.33 |
0.37 |
3.03 |
(8.11) |
||||||||
|
Net interest margin on TE basis1 |
3.33 |
% |
3.39 |
% |
3.60 |
% |
|||||||
|
Return on average assets |
0.93 |
0.90 |
1.03 |
||||||||||
|
Return on average common equity |
8.05 |
7.85 |
9.03 |
||||||||||
|
Return on average tangible common equity 1 |
11.69 |
11.44 |
13.41 |
||||||||||
The increase in net interest income TE compared to the second quarter 2015 was attributable to higher earning assets and an additional day in the current quarter, partially offset by lower interest income on acquired and FDIC acquired loans. The net interest margin in the third quarter of 2015 declined six basis points over the prior quarter primarily from runoff in the acquired and FDIC acquired portfolios and slightly lower yields on the investment portfolio. Originated portfolio yields increased in the third quarter 2015 primarily due to an increased mix of consumer loans.
Loans
Average originated loans were $13.5 billion during the third quarter 2015, an increase of $435.3 million, or 3.32%, compared with the second quarter 2015, and an increase of $1.7 billion, or 14.51%, compared with the third quarter 2014. The loan growth was driven primarily by installment loans. Average originated installment loans increased $198.9 million, or 7.60%, compared with the prior quarter, and increased $646.0 million, or 29.75%, compared with the year-ago quarter. This growth is a result of introducing recreational lending into the Corporation's legacy markets and expanding indirect auto lending into Michigan and Wisconsin. Average originated commercial loans also increased $177.3 million, or 2.08%, compared with the prior quarter, and increased $822.6 million, or 10.46%, compared with the year-ago quarter.
Deposits
Average deposits were $20.0 billion during the third quarter 2015, an increase of $274.9 million, or 1.40%, compared with the second quarter 2015, and an increase of $425.8 million, or 2.18%, compared with the third quarter 2014. Average core deposits were $17.7 billion during the third quarter 2015, or 88.85% of total average deposits, an increase of $338.1 million, or 1.94%, compared with the second quarter 2015 and an increase of $535.8 million, or 3.12%, compared with the third quarter 2014. Partially offsetting the increases in average core deposits was a decrease in average time deposits of $63.1 million, or 2.76%, and $110.0 million, or 4.71%, over the prior and year-ago quarters, respectively.
|
1 - See Non-GAAP Financial Measures section of this release for a reconciliation to financial measures as defined by GAAP. |
Noninterest Income
|
Change 3Q 2015 vs. | |||||||||||||
|
2015 |
2015 |
2014 |
2015 |
2014 | |||||||||
|
(Dollars in thousands) |
3rd qtr |
2nd qtr |
3rd qtr |
2nd qtr |
3rd qtr | ||||||||
|
Trust department income |
$ |
10,948 |
$ |
10,820 |
$ |
10,300 |
1.18 |
% |
6.29 |
% | |||
|
Service charges on deposits |
17,295 |
16,704 |
18,684 |
3.54 |
(7.43) |
||||||||
|
Credit card fees |
13,939 |
14,124 |
13,754 |
(1.31) |
1.35 |
||||||||
|
ATM and other service fees |
6,518 |
6,345 |
6,182 |
2.73 |
5.44 |
||||||||
|
Bank owned life insurance income |
4,622 |
3,697 |
4,218 |
25.02 |
9.58 |
||||||||
|
Investment services and insurance |
4,032 |
3,871 |
3,606 |
4.16 |
11.81 |
||||||||
|
Investment securities gains/(losses), net |
41 |
567 |
14 |
(92.77) |
192.86 |
||||||||
|
Loan sales and servicing income |
2,414 |
3,276 |
4,740 |
(26.31) |
(49.07) |
||||||||
|
Other operating income |
11,617 |
7,178 |
8,235 |
61.84 |
41.07 |
||||||||
|
Total noninterest income |
$ |
71,426 |
$ |
66,582 |
$ |
69,733 |
7.28 |
% |
2.43 |
% | |||
|
Noninterest income, excluding net securities gains, as a percentage of net revenue1 |
27.40 |
% |
25.88 |
% |
26.08 |
% |
|||||||
Noninterest income, excluding gains and losses on securities transactions1, for the third quarter 2015 was $71.4 million, an increase of $5.4 million, or 8.13%, from the second quarter 2015 and an increase of $1.7 million, or 2.39%, from the third quarter 2014. Fee based income increased across multiple areas including wealth management, treasury management, and service charges on deposits accounts. Loan sales and servicing income decreased from the prior quarter primarily due to interest rate fluctuations that negatively impacted the value of the mortgage servicing rights. Other operating income increased over the prior quarter as a result of higher loan commitment fees, fees on interest rate swaps, and income on resolution of FDIC acquired loans. Additionally, other operating income in the prior quarter was reduced by $1.8 million from losses on branch closures.
|
1 - See Non-GAAP Financial Measures section of this release for a reconciliation to financial measures as defined by GAAP. |
Noninterest Expense
|
Change 3Q 2015 vs. | |||||||||||||
|
2015 |
2015 |
2014 |
2015 |
2014 | |||||||||
|
(Dollars in thousands) |
3rd qtr |
2nd qtr |
3rd qtr |
2nd qtr |
3rd qtr | ||||||||
|
Salaries and wages |
$ |
68,775 |
$ |
67,485 |
$ |
71,769 |
1.91 |
% |
(4.17) |
% | |||
|
Pension and employee benefits |
16,997 |
18,535 |
18,824 |
(8.30) |
% |
(9.71) |
% | ||||||
|
Net occupancy expense |
13,540 |
13,727 |
13,887 |
(1.36) |
% |
(2.50) |
% | ||||||
|
Equipment expense |
12,235 |
12,592 |
12,188 |
(2.84) |
% |
0.39 |
% | ||||||
|
Taxes, other than federal income taxes |
2,003 |
2,032 |
1,286 |
(1.43) |
% |
55.75 |
% | ||||||
|
Stationary, supplies and postage |
3,304 |
3,370 |
3,723 |
(1.96) |
% |
(11.25) |
% | ||||||
|
Bankcard, loan processing and other costs |
12,335 |
12,461 |
11,151 |
(1.01) |
% |
10.62 |
% | ||||||
|
Advertising |
4,278 |
3,103 |
3,942 |
37.87 |
% |
8.52 |
% | ||||||
|
Professional services |
5,154 |
5,358 |
5,270 |
(3.81) |
% |
(2.20) |
% | ||||||
|
Telephone |
2,480 |
2,599 |
2,831 |
(4.58) |
% |
(12.40) |
% | ||||||
|
Amortization of intangibles |
2,598 |
2,598 |
2,933 |
— |
% |
(11.42) |
% | ||||||
|
FDIC expense |
5,234 |
5,077 |
2,988 |
3.09 |
% |
75.17 |
% | ||||||
|
Other operating expenses |
11,809 |
12,737 |
12,353 |
(7.29) |
% |
(4.40) |
% | ||||||
|
Total noninterest expense |
$ |
160,742 |
$ |
161,674 |
$ |
163,145 |
(0.58) |
% |
(1.47) |
% | |||
|
Efficiency ratio1 |
60.71 |
% |
62.37 |
% |
59.92 |
% |
|||||||
Noninterest expense for the third quarter 2015 was $160.7 million, a decrease of $0.9 million, or 0.58%, from the second quarter 2015, and a decrease of $2.4 million, or 1.47%, from the third quarter 2014. Salaries and wages and employee benefits were down $4.8 million, or 5.3%, compared with the year ago-period reflecting 341, or 7.9%, fewer full time equivalent employees. Compared to the second quarter of 2015, salaries and wages increased $1.3 million, or 1.91%, reflecting the impact of merit increases and an additional day in the current quarter.
Provision for Income Taxes
The effective tax rate was 27.80% for the third quarter 2015, compared with 30.19% for the second quarter 2015, and 29.76% for the third quarter 2014.
|
1 - See Non-GAAP Financial Measures section of this release for a reconciliation to financial measures as defined by GAAP. |
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.
|
Change 3Q 2015 vs. | |||||||||||||
|
2015 |
2015 |
2014 |
2015 |
2014 | |||||||||
|
(Dollars in thousands) |
3rd qtr |
2nd qtr |
3rd qtr |
2nd qtr |
3rd qtr | ||||||||
|
Net charge-offs |
$ |
8,029 |
$ |
6,672 |
$ |
5,929 |
20.34 |
% |
35.42 |
% | |||
|
Net charge-offs on average originated loans |
0.24 |
% |
0.20 |
% |
0.20 |
% |
|||||||
|
Nonperforming loans at period end |
$ |
47,036 |
$ |
55,142 |
$ |
34,617 |
(14.70) |
% |
19.62 |
% | |||
|
Nonperforming assets at period end |
$ |
107,058 |
$ |
117,311 |
$ |
63,119 |
(8.74) |
% |
69.61 |
% | |||
|
Allowance for loan losses |
104,055 |
101,682 |
90,883 |
2.33 |
% |
14.49 |
% | ||||||
|
Allowance for loan losses to nonperforming loans |
221.22 |
% |
184.40 |
% |
231.13 |
% |
|||||||
|
Provision for originated loan losses |
$ |
10,402 |
$ |
10,809 |
$ |
4,862 |
(3.77) |
% |
113.94 |
% | |||
Nonperforming assets totaled $107.1 million at September 30, 2015, a decrease of $10.3 million, or 8.74%, compared with June 30, 2015 and an increase of $43.9 million, or 69.61%, compared with September 30, 2014. Nonperforming assets at September 30, 2015 represented 0.78% of period-end originated loans plus noncovered other real estate compared with 0.87% at June 30, 2015 and 0.52% at September 30, 2014. Included in nonperforming assets as of September 30, 2015 and June 30, 2015 were $40.0 million and $42.0 million, respectively, of OREO no longer covered by FDIC loss share agreements.
The allowance for originated loan losses totaled $104.1 million at September 30, 2015. At September 30, 2015, the allowance for originated loan losses was 0.76% of period-end originated loans, compared with 0.76% at June 30, 2015 and 0.75% at September 30, 2014. The allowance for originated loan losses at September 30, 2015 compared to June 30, 2015 increased by $2.4 million and increased by $13.2 million compared to September 30, 2014. The allowance for credit losses is the sum of the allowance for originated loan losses and the reserve for unfunded lending commitments. The allowance for credit losses was 0.79% of period end originated loans at September 30, 2015, compared with 0.79% at June 30, 2015 and 0.81% at September 30, 2014. The allowance for credit losses to nonperforming loans was 228.82% at September 30, 2015, compared with 191.48% at June 30, 2015 and 248.85% at September 30, 2014.
Capital
Shareholders' equity was $2.9 billion, $2.9 billion and $2.8 billion as of September 30, 2015, June 30, 2015, and September 30, 2014, respectively. The Corporation maintained a strong capital position as tangible common equity1 to assets was 8.31% at September 30, 2015, compared with 8.09% at June 30, 2015 and 8.01% at September 30, 2014. The common share cash dividend paid in the third quarter 2015 was $0.17 per share, an increase of $0.01 per share, or 6.25%, from the prior quarter.
|
1 - See Non-GAAP Financial Measures section of this release for a reconciliation to financial measures as defined by GAAP. |
On January 1, 2015, the Corporation became subject to the Basel III capital framework and standardized approach for calculating risk-weighted assets. At September 30, 2015, Basel III capital ratios on a transitional basis remain well in excess of applicable regulatory requirements, with a total risk-based capital ratio of 13.71%, and a common equity tier 1 risk-based capital ratio of 10.58%.
Non-GAAP Financial Measures
In addition to results presented in accordance with U.S. generally accepted accounting principles ("GAAP"), this news release contains certain non-GAAP financial information and performance measures. The Corporation's management uses these non-GAAP financial measures in their analysis of the Corporation's performance and the efficiency of its operations. Management believes that these non-GAAP financial 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.
The Corporation evaluates its net interest income on a fully taxable-equivalent basis, a non-GAAP financial measure. The Corporation believes managing the business with net interest income on a fully taxable-equivalent basis provides a more accurate picture of the interest margin for comparative purposes. Total revenue, net of interest expense, includes net interest income on a fully taxable-equivalent basis and noninterest income excluding gains and losses on the sale of securities. The Corporation views related ratios and analysis (i.e., efficiency ratios) on a fully taxable-equivalent basis. To derive the fully taxable-equivalent basis, net interest income is adjusted to reflect tax-exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. For purposes of this calculation, the Corporation uses the federal statutory tax rate of 35 percent. This measure ensures comparability of net interest income arising from taxable and tax-exempt sources.
The Corporation also evaluates its business based on the following ratios that utilize tangible equity, a non-GAAP financial measure. Tangible equity represents an adjusted shareholders' equity or common shareholders' equity amount which has been reduced by goodwill and intangible assets. Return on average tangible common shareholders' equity measures the Corporation's earnings contribution as a percentage of adjusted average common shareholders' equity. The tangible common equity ratio represents adjusted ending common shareholders' equity divided by total assets less goodwill and intangible assets. Return on average tangible shareholders' equity measures the Corporation's earnings contribution as a percentage of adjusted average total shareholders' equity. The tangible equity ratio represents adjusted ending shareholders' equity divided by total assets less goodwill and intangible assets. Tangible book value per common share represents adjusted ending common shareholders' equity divided by ending common shares outstanding. These measures are used to evaluate the Corporation's use of equity. In addition, profitability, relationship and investment models all use return on average tangible shareholders' equity as key measures to support our overall growth goals.
The following tables provide reconciliations of these non-GAAP measures to financial measures defined by GAAP.
|
Reconciliation of net interest income to net interest income on a fully taxable-equivalent basis | ||||||||||||||||
|
Quarters | ||||||||||||||||
|
(unaudited) |
2015 |
2015 |
2015 |
2014 |
2014 | |||||||||||
|
(Dollars in thousands) |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
3rd qtr | |||||||||||
|
Net interest income (GAAP) |
$ |
185,323 |
$ |
185,118 |
$ |
185,623 |
$ |
192,511 |
$ |
193,578 |
||||||
|
Plus: |
Fully taxable-equivalent adjustment |
3,796 |
3,900 |
3,931 |
3,998 |
4,066 |
||||||||||
|
Net interest income on a fully taxable-equivalent basis (non-GAAP) |
189,119 |
189,018 |
189,554 |
196,509 |
197,644 |
|||||||||||
|
Average earning assets |
22,548,977 |
22,352,721 |
22,100,417 |
21,920,889 |
21,804,243 |
|||||||||||
|
Net interest margin on a fully taxable-equivalent basis (non-GAAP) |
3.33 |
% |
3.39 |
% |
3.48 |
% |
3.56 |
% |
3.60 |
% | ||||||
|
Reconciliation of noninterest income and noninterest expense to adjusted noninterest income and adjusted noninterest expense | ||||||||||||||||
|
Quarters | ||||||||||||||||
|
(unaudited) |
2015 |
2015 |
2015 |
2014 |
2014 | |||||||||||
|
(Dollars in thousands) |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
3rd qtr | |||||||||||
|
Noninterest expense (GAAP) |
$ |
160,742 |
$ |
161,674 |
$ |
160,652 |
$ |
165,041 |
$ |
163,145 |
||||||
|
Less: |
Intangible asset amortization |
2,598 |
2,598 |
2,598 |
2,933 |
2,933 |
||||||||||
|
Adjusted noninterest expense (non-GAAP) |
158,144 |
159,076 |
158,054 |
162,108 |
160,212 |
|||||||||||
|
Noninterest income (GAAP) |
71,426 |
66,582 |
65,847 |
71,960 |
69,733 |
|||||||||||
|
Less: |
Securities gains/(losses) |
41 |
567 |
354 |
16 |
14 |
||||||||||
|
Adjusted noninterest income (non-GAAP) |
71,385 |
66,015 |
65,493 |
71,944 |
69,719 |
|||||||||||
|
Net interest income on a fully taxable-equivalent basis (non-GAAP) |
189,119 |
189,018 |
189,554 |
196,509 |
197,644 |
|||||||||||
|
Adjusted revenue (non-GAAP) |
260,504 |
255,033 |
255,047 |
268,453 |
267,363 |
|||||||||||
|
Efficiency ratio (non-GAAP) |
60.71 |
% |
62.37 |
% |
61.97 |
% |
60.39 |
% |
59.92 |
% | ||||||
|
Reconciliation of shareholders' equity to tangible common equity, and total assets to tangible assets | ||||||||||||||||
|
Quarters | ||||||||||||||||
|
(unaudited) |
2015 |
2015 |
2015 |
2014 |
2014 | |||||||||||
|
(Dollars in thousands, except per share amounts) |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
3rd qtr | |||||||||||
|
Shareholders' equity (GAAP) |
$ |
2,937,300 |
$ |
2,887,957 |
$ |
2,888,786 |
$ |
2,834,281 |
$ |
2,820,431 |
||||||
|
Less: |
Preferred stock |
100,000 |
100,000 |
100,000 |
100,000 |
100,000 |
||||||||||
|
Common shareholders' equity (non-GAAP) |
2,837,300 |
2,787,957 |
2,788,786 |
2,734,281 |
2,720,431 |
|||||||||||
|
Less: |
Intangible assets |
63,226 |
65,824 |
68,422 |
71,020 |
73,953 |
||||||||||
|
Goodwill |
741,740 |
741,740 |
741,740 |
741,740 |
741,740 |
|||||||||||
|
Tangible common equity (non-GAAP) |
2,032,334 |
1,980,393 |
1,978,624 |
1,921,521 |
1,904,738 |
|||||||||||
|
Total assets (GAAP) |
$ |
25,246,917 |
$ |
25,297,014 |
$ |
25,118,120 |
$ |
24,902,347 |
$ |
24,608,207 |
||||||
|
Less: |
Intangible assets |
63,226 |
65,824 |
68,422 |
71,020 |
73,953 |
||||||||||
|
Goodwill |
741,740 |
741,740 |
741,740 |
741,740 |
741,740 |
|||||||||||
|
Tangible assets (non-GAAP) |
$ |
24,441,951 |
$ |
24,489,450 |
$ |
24,307,958 |
$ |
24,089,587 |
$ |
23,792,514 |
||||||
|
Period end common shares |
165,759 |
165,773 |
165,453 |
165,390 |
165,384 |
|||||||||||
|
Tangible book value per common share |
$ |
12.26 |
$ |
11.95 |
$ |
11.96 |
$ |
11.62 |
$ |
11.52 |
||||||
|
Tangible common equity to tangible assets ratio (non-GAAP) |
8.31 |
% |
8.09 |
% |
8.14 |
% |
7.98 |
% |
8.01 |
% | ||||||
Subsequent Events
The Corporation is required under GAAP to evaluate subsequent events through the filing of its consolidated financial statements for the quarter ended September 30, 2015 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, 2015 and will adjust amounts preliminarily reported, if necessary.
Third Quarter 2015 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) 708-5710 ten minutes before start time and provide the reservation number: 823849.
A replay of the conference call will be available at approximately 2:00 p.m. (Eastern Time) on October 27, 2015 through November 10, 2015 by dialing (888) 203-1112, and entering the PIN: 823849. 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/about-us/investors/index.html; 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 approximately $25.2 billion as of September 30, 2015, and 367 banking offices and 399 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. and FirstMerit Mortgage Corporation.
Forward-Looking Statements
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Corporation, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, continued softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Corporation's business, competitive pressures, changes in accounting, tax or regulatory practices or requirements, and those risk factors detailed in the Corporation's periodic reports filed with the Securities and Exchange Commission. The Corporation undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||
|
Consolidated Financial Highlights |
|||||||||||||||
|
(Unaudited) |
Quarters |
||||||||||||||
|
(Dollars in thousands, except per share amounts) |
2015 |
2015 |
2015 |
2014 |
2014 | ||||||||||
|
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
3rd qtr | |||||||||||
|
EARNINGS |
|||||||||||||||
|
Net interest income TE (1) |
$ |
189,119 |
$ |
189,018 |
$ |
189,554 |
$ |
196,509 |
$ |
197,644 |
|||||
|
TE adjustment (1) |
3,796 |
3,900 |
3,931 |
3,998 |
4,066 |
||||||||||
|
Provision for originated loan losses |
10,402 |
10,809 |
6,036 |
8,662 |
4,862 |
||||||||||
|
Provision/(recapture) for acquired loan losses |
144 |
(952) |
2,214 |
3,407 |
4,411 |
||||||||||
|
Provision/(recapture) for FDIC acquired loan losses |
3,729 |
(891) |
(2) |
1,228 |
(81) |
||||||||||
|
Noninterest income |
71,426 |
66,582 |
65,847 |
71,960 |
69,733 |
||||||||||
|
Noninterest expense |
160,742 |
161,674 |
160,652 |
165,041 |
163,145 |
||||||||||
|
Net income |
59,012 |
56,584 |
57,139 |
61,079 |
63,898 |
||||||||||
|
Diluted EPS (3) |
0.34 |
0.33 |
0.33 |
0.36 |
0.37 |
||||||||||
|
PERFORMANCE RATIOS |
|||||||||||||||
|
Return on average assets (ROA) |
0.93 |
% |
0.90 |
% |
0.93 |
% |
0.98 |
% |
1.03 |
% | |||||
|
Return on average equity (ROE) |
8.05 |
% |
7.85 |
% |
8.08 |
% |
8.50 |
% |
9.03 |
% | |||||
|
Return on average tangible common equity (1) |
11.69 |
% |
11.44 |
% |
11.85 |
% |
12.52 |
% |
13.41 |
% | |||||
|
Net interest margin TE (1) |
3.33 |
% |
3.39 |
% |
3.48 |
% |
3.56 |
% |
3.60 |
% | |||||
|
Efficiency ratio (1) |
60.71 |
% |
62.37 |
% |
61.97 |
% |
60.39 |
% |
59.92 |
% | |||||
|
Number of full-time equivalent employees |
3,961 |
4,017 |
4,103 |
4,273 |
4,302 |
||||||||||
|
MARKET DATA |
|||||||||||||||
|
Book value per common share |
$ |
17.72 |
$ |
17.42 |
$ |
17.46 |
$ |
17.14 |
$ |
17.05 |
|||||
|
Tangible book value per common share (1) |
12.26 |
11.95 |
11.96 |
11.62 |
11.52 |
||||||||||
|
Period end common share market value |
17.67 |
20.83 |
19.06 |
18.89 |
17.62 |
||||||||||
|
Market as a % of book |
100 |
% |
120 |
% |
109 |
% |
110 |
% |
103 |
% | |||||
|
Cash dividends per common share |
$ |
0.17 |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
|||||
|
Common Stock dividend payout ratio |
50.00 |
% |
48.48 |
% |
48.48 |
% |
44.44 |
% |
43.24 |
% | |||||
|
Average basic common shares |
165,762 |
165,736 |
165,411 |
165,395 |
165,389 |
||||||||||
|
Average diluted common shares |
166,058 |
166,277 |
166,003 |
165,974 |
165,804 |
||||||||||
|
Period end common shares |
165,759 |
165,773 |
165,453 |
165,390 |
165,384 |
||||||||||
|
Common shares repurchased |
20 |
211 |
66 |
15 |
10 |
||||||||||
|
Common Stock market capitalization |
$ |
2,928,962 |
$ |
3,453,052 |
$ |
3,153,534 |
$ |
3,124,217 |
$ |
2,914,066 |
|||||
|
ASSET QUALITY (excluding acquired, FDIC acquired loans and covered OREO) (2) |
|||||||||||||||
|
Gross charge-offs |
$ |
13,398 |
$ |
11,298 |
$ |
8,567 |
$ |
9,205 |
$ |
11,410 |
|||||
|
Net charge-offs |
8,029 |
6,672 |
4,187 |
3,849 |
5,929 |
||||||||||
|
Allowance for originated loan losses |
104,055 |
101,682 |
97,545 |
95,696 |
90,883 |
||||||||||
|
Reserve for unfunded lending commitments |
3,574 |
3,905 |
4,330 |
5,848 |
6,966 |
||||||||||
|
Nonperforming assets (NPAs) |
107,058 |
117,311 |
68,606 |
55,038 |
63,119 |
||||||||||
|
Net charge-offs to average loans ratio |
0.24 |
% |
0.20 |
% |
0.13 |
% |
0.12 |
% |
0.20 |
% | |||||
|
Allowance for originated loan losses to period-end loans |
0.76 |
% |
0.76 |
% |
0.76 |
% |
0.77 |
% |
0.75 |
% | |||||
|
Allowance for credit losses to period-end loans |
0.79 |
% |
0.79 |
% |
0.79 |
% |
0.81 |
% |
0.81 |
% | |||||
|
NPAs to loans and other real estate |
0.78 |
% |
0.87 |
% |
0.53 |
% |
0.44 |
% |
0.52 |
% | |||||
|
Allowance for originated loan losses to nonperforming loans |
221.22 |
% |
184.40 |
% |
211.66 |
% |
276.44 |
% |
231.13 |
% | |||||
|
Allowance for credit losses to nonperforming loans |
228.82 |
% |
191.48 |
% |
221.06 |
% |
293.34 |
% |
248.85 |
% | |||||
|
CAPITAL & LIQUIDITY |
|||||||||||||||
|
Period end tangible common equity to assets (1) |
8.31 |
% |
8.09 |
% |
8.14 |
% |
7.98 |
% |
8.01 |
% | |||||
|
Average equity to assets |
11.54 |
% |
11.51 |
% |
11.51 |
% |
11.55 |
% |
11.42 |
% | |||||
|
Average equity to total loans |
18.48 |
% |
18.59 |
% |
18.60 |
% |
18.67 |
% |
18.58 |
% | |||||
|
Average total loans to deposits |
78.91 |
% |
79.06 |
% |
77.86 |
% |
78.47 |
% |
77.36 |
% | |||||
|
AVERAGE BALANCES |
|||||||||||||||
|
Assets |
$ |
25,217,856 |
$ |
25,129,859 |
$ |
24,905,094 |
$ |
24,664,987 |
$ |
24,583,776 |
|||||
|
Deposits |
19,957,586 |
19,682,662 |
19,788,925 |
19,450,647 |
19,531,800 |
||||||||||
|
Originated loans |
13,528,268 |
13,092,972 |
12,689,791 |
12,306,171 |
11,814,314 |
||||||||||
|
Acquired loans, including FDIC acquired loans, less loss share receivable |
2,219,488 |
2,468,035 |
2,717,884 |
2,956,867 |
3,295,547 |
||||||||||
|
Earning assets |
22,548,977 |
22,352,721 |
22,100,417 |
21,920,889 |
21,804,243 |
||||||||||
|
Shareholders' equity |
2,909,660 |
2,892,432 |
2,866,362 |
2,849,618 |
2,807,886 |
||||||||||
|
ENDING BALANCES |
|||||||||||||||
|
Assets |
$ |
25,246,917 |
$ |
25,297,014 |
$ |
25,118,120 |
$ |
24,902,347 |
$ |
24,608,207 |
|||||
|
Deposits |
19,821,916 |
19,673,850 |
19,925,595 |
19,504,665 |
19,366,911 |
||||||||||
|
Originated loans |
13,648,325 |
13,355,912 |
12,856,037 |
12,493,812 |
12,071,759 |
||||||||||
|
Acquired loans, including FDIC acquired loans, less loss share receivable |
2,140,029 |
2,337,378 |
2,614,847 |
2,810,302 |
3,139,521 |
||||||||||
|
Goodwill |
741,740 |
741,740 |
741,740 |
741,740 |
741,740 |
||||||||||
|
Intangible assets |
63,226 |
65,824 |
68,422 |
71,020 |
73,953 |
||||||||||
|
Earning assets |
22,661,171 |
22,599,272 |
22,395,343 |
22,153,552 |
21,930,840 |
||||||||||
|
Total shareholders' equity |
2,937,300 |
2,887,957 |
2,888,786 |
2,834,281 |
2,820,431 |
||||||||||
|
NOTES: |
|||||||||||||||
|
(1) Represents a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures section of this press release for a reconciliation to GAAP financial measures. |
|
(2) Due to the impact of business combination accounting and protection of FDIC loss sharing agreements, which provide considerable protection against credit risk, acquired and FDIC acquired loans and covered OREO are excluded from this table to provide for improved comparability to prior periods and better perspective into asset quality trends. George Washington and Midwest non-single family loss share agreements with the FDIC expired at March 31, 2015 and June 30, 2015, respectively. As of September 30, 2015, $85.9 million of FDIC acquired loans remained covered by single family loss share agreements, providing considerable protection against credit risk. |
|
(3) 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. |
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||||||||
|
(In thousands, except per share amounts) |
September 30, |
December 31, |
September 30, | |||||||||||
|
(Unaudited, except December 31, 2014, which is derived from the audited financial statements) |
2015 |
2014 |
2014 | |||||||||||
|
ASSETS |
||||||||||||||
|
Cash and due from banks |
$ |
357,397 |
$ |
480,998 |
$ |
429,699 |
||||||||
|
Interest-bearing deposits in banks |
54,190 |
216,426 |
55,629 |
|||||||||||
|
Total cash and cash equivalents |
411,587 |
697,424 |
485,328 |
|||||||||||
|
Investment securities: |
||||||||||||||
|
Held-to-maturity |
2,728,638 |
2,903,609 |
3,002,262 |
|||||||||||
|
Available-for-sale |
3,925,724 |
3,545,288 |
3,462,990 |
|||||||||||
|
Other investments |
147,955 |
148,654 |
148,421 |
|||||||||||
|
Loans held for sale |
5,384 |
13,428 |
19,512 |
|||||||||||
|
Loans |
15,799,280 |
15,326,147 |
15,242,026 |
|||||||||||
|
Allowance for loan losses |
(153,450) |
(143,649) |
(140,077) |
|||||||||||
|
Net loans |
15,645,830 |
15,182,498 |
15,101,949 |
|||||||||||
|
Premises and equipment, net |
311,129 |
332,297 |
318,690 |
|||||||||||
|
Goodwill |
741,740 |
741,740 |
741,740 |
|||||||||||
|
Intangible assets |
63,226 |
71,020 |
73,953 |
|||||||||||
|
Covered other real estate |
1,986 |
49,641 |
51,434 |
|||||||||||
|
Accrued interest receivable and other assets |
1,263,718 |
1,216,748 |
1,201,928 |
|||||||||||
|
Total assets |
$ |
25,246,917 |
$ |
24,902,347 |
$ |
24,608,207 |
||||||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||||||
|
Deposits: |
||||||||||||||
|
Noninterest-bearing |
$ |
5,865,255 |
$ |
5,786,662 |
$ |
5,535,886 |
||||||||
|
Interest-bearing |
3,335,190 |
3,028,888 |
3,043,952 |
|||||||||||
|
Savings and money market accounts |
8,380,921 |
8,399,612 |
8,396,064 |
|||||||||||
|
Certificates and other time deposits |
2,240,550 |
2,289,503 |
2,391,009 |
|||||||||||
|
Total deposits |
19,821,916 |
19,504,665 |
19,366,911 |
|||||||||||
|
Federal funds purchased and securities sold under agreements to repurchase |
1,208,275 |
1,272,591 |
1,273,290 |
|||||||||||
|
Wholesale borrowings |
381,299 |
428,071 |
608,463 |
|||||||||||
|
Long-term debt |
508,947 |
505,192 |
249,933 |
|||||||||||
|
Accrued taxes, expenses, and other liabilities |
389,180 |
357,547 |
289,179 |
|||||||||||
|
Total liabilities |
22,309,617 |
22,068,066 |
21,787,776 |
|||||||||||
|
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 |
|||||||||||
|
Common Stock, without par value; authorized 300,000,000 shares; issued: September 30, 2015, December 31, 2014 and September 30, 2014 - 170,183,515 shares |
127,937 |
127,937 |
127,937 |
|||||||||||
|
Capital surplus |
1,382,714 |
1,393,090 |
1,390,207 |
|||||||||||
|
Accumulated other comprehensive loss |
(50,766) |
(71,892) |
(49,583) |
|||||||||||
|
Retained earnings |
1,492,245 |
1,404,717 |
1,371,453 |
|||||||||||
|
Treasury stock, at cost: September 30, 2015 - 4,424,712; December 31, 2014 - 4,793,566 shares; September 30, 2014 - 4,799,239 shares |
(114,830) |
(122,571) |
(122,583) |
|||||||||||
|
Total shareholders' equity |
2,937,300 |
2,834,281 |
2,820,431 |
|||||||||||
|
Total liabilities and shareholders' equity |
$ |
25,246,917 |
$ |
24,902,347 |
$ |
24,608,207 |
||||||||
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES Period End Loans by Product Type |
|||||||||||||||
|
(Unaudited) |
As of September 30, 2015 | ||||||||||||||
|
(In thousands) |
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | |||||||||||
|
C&I |
$ |
5,521,955 |
$ |
274,552 |
$ |
38,787 |
$ |
5,835,294 |
|||||||
|
CRE |
2,089,533 |
497,690 |
94,531 |
2,681,754 |
|||||||||||
|
Construction |
619,569 |
6,172 |
5,859 |
631,600 |
|||||||||||
|
Leases |
461,642 |
— |
— |
461,642 |
|||||||||||
|
Total Commercial |
8,692,699 |
778,414 |
139,177 |
9,610,290 |
|||||||||||
|
Mortgage |
673,591 |
341,278 |
36,362 |
1,051,231 |
|||||||||||
|
Installment |
2,899,559 |
611,061 |
2,156 |
3,512,776 |
|||||||||||
|
Home equity |
1,212,084 |
184,211 |
47,370 |
1,443,665 |
|||||||||||
|
Credit card |
170,392 |
— |
— |
170,392 |
|||||||||||
|
Total Consumer |
4,955,626 |
1,136,550 |
85,888 |
6,178,064 |
|||||||||||
|
Subtotal |
13,648,325 |
1,914,964 |
225,065 |
15,788,354 |
|||||||||||
|
Loss share receivable |
— |
— |
10,926 |
10,926 |
|||||||||||
|
Total loans |
13,648,325 |
1,914,964 |
235,991 |
15,799,280 |
|||||||||||
|
Allowance for loan losses |
(104,055) |
(4,199) |
(45,196) |
(153,450) |
|||||||||||
|
Net loans |
$ |
13,544,270 |
$ |
1,910,765 |
$ |
190,795 |
$ |
15,645,830 |
|||||||
|
As of June 30, 2015 | |||||||||||||||
|
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | ||||||||||||
|
C&I |
$ |
5,471,363 |
$ |
337,423 |
$ |
38,138 |
$ |
5,846,924 |
|||||||
|
CRE |
2,138,373 |
533,945 |
101,808 |
2,774,126 |
|||||||||||
|
Construction |
586,894 |
6,230 |
5,875 |
598,999 |
|||||||||||
|
Leases |
436,702 |
— |
— |
436,702 |
|||||||||||
|
Total Commercial |
8,633,332 |
877,598 |
145,821 |
9,656,751 |
|||||||||||
|
Mortgage |
653,143 |
358,559 |
38,029 |
1,049,731 |
|||||||||||
|
Installment |
2,720,059 |
659,348 |
2,299 |
3,381,706 |
|||||||||||
|
Home equity |
1,180,802 |
200,179 |
55,545 |
1,436,526 |
|||||||||||
|
Credit card |
168,576 |
— |
— |
168,576 |
|||||||||||
|
Total Consumer |
4,722,580 |
1,218,086 |
95,873 |
6,036,539 |
|||||||||||
|
Subtotal |
13,355,912 |
2,095,684 |
241,694 |
15,693,290 |
|||||||||||
|
Loss share receivable |
— |
— |
11,820 |
11,820 |
|||||||||||
|
Total loans |
13,355,912 |
2,095,684 |
253,514 |
15,705,110 |
|||||||||||
|
Allowance for loan losses |
(101,682) |
(4,950) |
(41,627) |
(148,259) |
|||||||||||
|
Net loans |
$ |
13,254,230 |
$ |
2,090,734 |
$ |
211,887 |
$ |
15,556,851 |
|||||||
|
As of March 31, 2015 | |||||||||||||||
|
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | ||||||||||||
|
C&I |
$ |
5,317,897 |
$ |
420,810 |
$ |
42,814 |
$ |
5,781,521 |
|||||||
|
CRE |
2,133,017 |
584,072 |
127,908 |
2,844,997 |
|||||||||||
|
Construction |
580,978 |
6,288 |
8,825 |
596,091 |
|||||||||||
|
Leases |
388,873 |
— |
— |
388,873 |
|||||||||||
|
Total Commercial |
8,420,765 |
1,011,170 |
179,547 |
9,611,482 |
|||||||||||
|
Mortgage |
639,980 |
378,192 |
40,470 |
1,058,642 |
|||||||||||
|
Installment |
2,500,288 |
717,693 |
4,781 |
3,222,762 |
|||||||||||
|
Home equity |
1,134,238 |
217,824 |
65,170 |
1,417,232 |
|||||||||||
|
Credit card |
160,766 |
— |
— |
160,766 |
|||||||||||
|
Total Consumer |
4,435,272 |
1,313,709 |
110,421 |
5,859,402 |
|||||||||||
|
Subtotal |
12,856,037 |
2,324,879 |
289,968 |
15,470,884 |
|||||||||||
|
Loss share receivable |
— |
— |
20,005 |
20,005 |
|||||||||||
|
Total loans |
12,856,037 |
2,324,879 |
309,973 |
15,490,889 |
|||||||||||
|
Allowance for loan losses |
(97,545) |
(7,493) |
(41,514) |
(146,552) |
|||||||||||
|
Net loans |
$ |
12,758,492 |
$ |
2,317,386 |
$ |
268,459 |
$ |
15,344,337 |
|||||||
|
As of December 31, 2014 | |||||||||||||||
|
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | ||||||||||||
|
C&I |
$ |
5,175,201 |
$ |
449,254 |
$ |
48,837 |
$ |
5,673,292 |
|||||||
|
CRE |
2,117,118 |
630,674 |
153,508 |
2,901,300 |
|||||||||||
|
Construction |
537,766 |
6,971 |
9,262 |
553,999 |
|||||||||||
|
Leases |
370,179 |
— |
— |
370,179 |
|||||||||||
|
Total Commercial |
8,200,264 |
1,086,899 |
211,607 |
9,498,770 |
|||||||||||
|
Mortgage |
625,283 |
394,484 |
41,276 |
1,061,043 |
|||||||||||
|
Installment |
2,393,451 |
764,168 |
4,874 |
3,162,493 |
|||||||||||
|
Home equity |
1,110,336 |
233,629 |
73,365 |
1,417,330 |
|||||||||||
|
Credit card |
164,478 |
— |
— |
164,478 |
|||||||||||
|
Total Consumer |
4,293,548 |
1,392,281 |
119,515 |
5,805,344 |
|||||||||||
|
Subtotal |
12,493,812 |
2,479,180 |
331,122 |
15,304,114 |
|||||||||||
|
Loss share receivable |
— |
— |
22,033 |
22,033 |
|||||||||||
|
Total loans |
12,493,812 |
2,479,180 |
353,155 |
15,326,147 |
|||||||||||
|
Allowance for loan losses |
(95,696) |
(7,457) |
(40,496) |
(143,649) |
|||||||||||
|
Net loans |
$ |
12,398,116 |
$ |
2,471,723 |
$ |
312,659 |
$ |
15,182,498 |
|||||||
|
As of September 30, 2014 | |||||||||||||||
|
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | ||||||||||||
|
C&I |
$ |
5,039,320 |
$ |
551,489 |
$ |
56,076 |
$ |
5,646,885 |
|||||||
|
CRE |
2,119,734 |
710,495 |
192,746 |
3,022,975 |
|||||||||||
|
Construction |
467,112 |
10,260 |
13,497 |
490,869 |
|||||||||||
|
Leases |
339,936 |
— |
— |
339,936 |
|||||||||||
|
Total Commercial |
7,966,102 |
1,272,244 |
262,319 |
9,500,665 |
|||||||||||
|
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 |
|||||||||||
|
Total Consumer |
4,105,657 |
1,472,860 |
132,098 |
5,710,615 |
|||||||||||
|
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 |
|||||||
|
(1) Loans assumed from Citizens. |
|
(2) Loans acquired in an FDIC-assisted transaction. Certain non-single family loss share agreements with the FDIC expired at March 31, 2015 and June 30, 2015. As of September 30, 2015, $85.9 million of FDIC acquired loans remained covered by single family loss share agreements, providing considerable protection against credit risk. |
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||
|
AVERAGE CONSOLIDATED BALANCE SHEETS |
|||||||||||||||||||
|
Three Months Ended | |||||||||||||||||||
|
(Unaudited) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, | ||||||||||||||
|
(In thousands) |
2015 |
2015 |
2015 |
2014 |
2014 | ||||||||||||||
|
ASSETS |
|||||||||||||||||||
|
Cash and cash equivalents |
$ |
457,317 |
$ |
518,820 |
$ |
563,265 |
$ |
500,559 |
$ |
521,210 |
|||||||||
|
Investment securities: |
|||||||||||||||||||
|
Held-to-maturity |
2,754,001 |
2,806,325 |
2,874,169 |
2,966,127 |
3,029,971 |
||||||||||||||
|
Available-for-sale |
3,881,959 |
3,816,827 |
3,645,057 |
3,499,528 |
3,460,312 |
||||||||||||||
|
Other investments |
147,961 |
148,577 |
148,532 |
148,636 |
148,427 |
||||||||||||||
|
Loans held for sale |
4,929 |
3,631 |
5,478 |
16,708 |
17,433 |
||||||||||||||
|
Loans |
15,760,127 |
15,577,361 |
15,427,181 |
15,289,890 |
15,148,100 |
||||||||||||||
|
Less: allowance for loan losses |
147,136 |
146,558 |
144,363 |
138,540 |
140,026 |
||||||||||||||
|
Net loans |
15,612,991 |
15,430,803 |
15,282,818 |
15,151,350 |
15,008,074 |
||||||||||||||
|
Total earning assets |
22,548,977 |
22,352,721 |
22,100,417 |
21,920,889 |
21,804,243 |
||||||||||||||
|
Premises and equipment, net |
313,336 |
320,492 |
322,431 |
321,187 |
317,366 |
||||||||||||||
|
Accrued interest receivable and other assets |
2,045,362 |
2,084,384 |
2,063,344 |
2,060,892 |
2,080,983 |
||||||||||||||
|
TOTAL ASSETS |
$ |
25,217,856 |
$ |
25,129,859 |
$ |
24,905,094 |
$ |
24,664,987 |
$ |
24,583,776 |
|||||||||
|
LIABILITIES |
|||||||||||||||||||
|
Deposits: |
|||||||||||||||||||
|
Noninterest-bearing |
$ |
5,897,768 |
$ |
5,722,240 |
$ |
5,728,763 |
$ |
5,706,631 |
$ |
5,603,104 |
|||||||||
|
Interest-bearing |
3,353,541 |
3,203,836 |
3,209,285 |
3,021,188 |
3,100,904 |
||||||||||||||
|
Savings and money market accounts |
8,480,682 |
8,467,845 |
8,542,154 |
8,381,548 |
8,492,172 |
||||||||||||||
|
Certificates and other time deposits |
2,225,595 |
2,288,741 |
2,308,723 |
2,341,280 |
2,335,620 |
||||||||||||||
|
Total deposits |
19,957,586 |
19,682,662 |
19,788,925 |
19,450,647 |
19,531,800 |
||||||||||||||
|
Federal funds purchased and securities sold under |
|||||||||||||||||||
|
agreements to repurchase |
1,109,924 |
1,285,920 |
1,024,863 |
1,241,948 |
1,182,507 |
||||||||||||||
|
Wholesale borrowings |
377,594 |
393,379 |
350,991 |
450,587 |
438,941 |
||||||||||||||
|
Long-term debt |
497,566 |
508,744 |
505,275 |
350,535 |
320,387 |
||||||||||||||
|
Total funds |
21,942,670 |
21,870,705 |
21,670,054 |
21,493,717 |
21,473,635 |
||||||||||||||
|
Accrued taxes, expenses and other liabilities |
365,526 |
366,722 |
368,678 |
321,652 |
302,255 |
||||||||||||||
|
Total liabilities |
22,308,196 |
22,237,427 |
22,038,732 |
21,815,369 |
21,775,890 |
||||||||||||||
|
SHAREHOLDERS' EQUITY |
|||||||||||||||||||
|
Preferred stock |
100,000 |
100,000 |
100,000 |
100,000 |
100,000 |
||||||||||||||
|
Common stock warrant |
— |
1,385 |
3,000 |
3,000 |
3,000 |
||||||||||||||
|
Common stock |
127,937 |
127,937 |
127,937 |
127,937 |
127,937 |
||||||||||||||
|
Capital surplus |
1,380,622 |
1,382,717 |
1,393,682 |
1,391,189 |
1,388,423 |
||||||||||||||
|
Accumulated other comprehensive loss |
(63,402) |
(51,571) |
(58,025) |
(38,827) |
(41,963) |
||||||||||||||
|
Retained earnings |
1,479,181 |
1,447,195 |
1,422,067 |
1,388,661 |
1,352,867 |
||||||||||||||
|
Treasury stock |
(114,678) |
(115,231) |
(122,299) |
(122,342) |
(122,378) |
||||||||||||||
|
Total shareholders' equity |
2,909,660 |
2,892,432 |
2,866,362 |
2,849,618 |
2,807,886 |
||||||||||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
25,217,856 |
$ |
25,129,859 |
$ |
24,905,094 |
$ |
24,664,987 |
$ |
24,583,776 |
|||||||||
|
FIRSTMERIT CORPORATION AND SUBSIDIARIESAverage Loans by Product Type(Unaudited) |
|||||||||||||||
|
(In thousands) |
Three Months Ended September 30, 2015 | ||||||||||||||
|
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | ||||||||||||
|
C&I |
$ |
5,503,191 |
$ |
291,727 |
$ |
38,332 |
$ |
5,833,250 |
|||||||
|
CRE |
2,139,943 |
516,945 |
96,739 |
2,753,627 |
|||||||||||
|
Construction |
599,652 |
6,200 |
5,916 |
611,768 |
|||||||||||
|
Leases |
441,513 |
— |
— |
441,513 |
|||||||||||
|
Total Commercial |
8,684,299 |
814,872 |
140,987 |
9,640,158 |
|||||||||||
|
Mortgage |
662,909 |
348,863 |
36,809 |
1,048,581 |
|||||||||||
|
Installment |
2,817,221 |
632,789 |
2,227 |
3,452,237 |
|||||||||||
|
Home equity |
1,194,165 |
190,947 |
51,994 |
1,437,106 |
|||||||||||
|
Credit card |
169,674 |
— |
— |
169,674 |
|||||||||||
|
Total Consumer |
4,843,969 |
1,172,599 |
91,030 |
6,107,598 |
|||||||||||
|
Subtotal |
13,528,268 |
1,987,471 |
232,017 |
15,747,756 |
|||||||||||
|
Loss share receivable |
— |
— |
12,371 |
12,371 |
|||||||||||
|
Total loans |
13,528,268 |
1,987,471 |
244,388 |
15,760,127 |
|||||||||||
|
Less allowance for loan losses |
102,153 |
4,143 |
40,840 |
147,136 |
|||||||||||
|
Net loans |
$ |
13,426,115 |
$ |
1,983,328 |
$ |
203,548 |
$ |
15,612,991 |
|||||||
|
Three Months ended June 30, 2015 | |||||||||||||||
|
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | ||||||||||||
|
C&I |
$ |
5,362,893 |
$ |
376,541 |
$ |
42,100 |
$ |
5,781,534 |
|||||||
|
CRE |
2,156,511 |
554,681 |
112,035 |
2,823,227 |
|||||||||||
|
Construction |
579,249 |
6,258 |
8,082 |
593,589 |
|||||||||||
|
Leases |
408,384 |
— |
— |
408,384 |
|||||||||||
|
Total Commercial |
8,507,037 |
937,480 |
162,217 |
9,606,734 |
|||||||||||
|
Mortgage |
647,418 |
367,871 |
39,438 |
1,054,727 |
|||||||||||
|
Installment |
2,618,297 |
688,465 |
3,823 |
3,310,585 |
|||||||||||
|
Home equity |
1,156,019 |
209,185 |
59,556 |
1,424,760 |
|||||||||||
|
Credit card |
164,201 |
— |
— |
164,201 |
|||||||||||
|
Total Consumer |
4,585,935 |
1,265,521 |
102,817 |
5,954,273 |
|||||||||||
|
Subtotal |
13,092,972 |
2,203,001 |
265,034 |
15,561,007 |
|||||||||||
|
Loss share receivable |
— |
— |
16,354 |
16,354 |
|||||||||||
|
Total loans |
13,092,972 |
2,203,001 |
281,388 |
15,577,361 |
|||||||||||
|
Less allowance for loan losses |
98,529 |
7,434 |
40,595 |
146,558 |
|||||||||||
|
Net loans |
$ |
12,994,443 |
$ |
2,195,567 |
$ |
240,793 |
$ |
15,430,803 |
|||||||
|
Three Months Ended March 31, 2015 | |||||||||||||||
|
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | ||||||||||||
|
C&I |
$ |
5,281,194 |
$ |
440,103 |
$ |
45,307 |
$ |
5,766,604 |
|||||||
|
CRE |
2,141,764 |
606,652 |
142,101 |
2,890,517 |
|||||||||||
|
Construction |
556,943 |
6,846 |
9,013 |
572,802 |
|||||||||||
|
Leases |
368,025 |
— |
— |
368,025 |
|||||||||||
|
Total Commercial |
8,347,926 |
1,053,601 |
196,421 |
9,597,948 |
|||||||||||
|
Mortgage |
631,761 |
386,033 |
40,800 |
1,058,594 |
|||||||||||
|
Installment |
2,424,956 |
742,095 |
4,822 |
3,171,873 |
|||||||||||
|
Home equity |
1,122,988 |
224,444 |
69,669 |
1,417,100 |
|||||||||||
|
Credit card |
162,160 |
— |
— |
162,160 |
|||||||||||
|
Total Consumer |
4,341,865 |
1,352,572 |
115,291 |
5,809,727 |
|||||||||||
|
Subtotal |
12,689,791 |
2,406,173 |
311,711 |
15,407,675 |
|||||||||||
|
Loss share receivable |
— |
— |
19,506 |
19,506 |
|||||||||||
|
Total loans |
12,689,791 |
2,406,173 |
331,217 |
15,427,181 |
|||||||||||
|
Less allowance for loan losses |
95,952 |
8,287 |
40,124 |
144,363 |
|||||||||||
|
Net loans |
$ |
12,593,839 |
$ |
2,397,886 |
$ |
291,093 |
$ |
15,282,818 |
|||||||
|
Three Months Ended December 31, 2014 | |||||||||||||||
|
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | ||||||||||||
|
C&I |
$ |
5,112,469 |
$ |
491,419 |
$ |
49,902 |
$ |
5,653,790 |
|||||||
|
CRE |
2,131,879 |
672,099 |
172,327 |
2,976,305 |
|||||||||||
|
Construction |
490,533 |
7,018 |
9,302 |
506,853 |
|||||||||||
|
Leases |
351,222 |
— |
— |
351,222 |
|||||||||||
|
Total Commercial |
8,086,103 |
1,170,536 |
231,531 |
9,488,170 |
|||||||||||
|
Mortgage |
617,803 |
401,173 |
42,409 |
1,061,385 |
|||||||||||
|
Installment |
2,353,599 |
785,035 |
4,944 |
3,143,578 |
|||||||||||
|
Home equity |
1,087,123 |
242,878 |
78,361 |
1,408,362 |
|||||||||||
|
Credit card |
161,543 |
— |
— |
161,543 |
|||||||||||
|
Total Consumer |
4,220,068 |
1,429,086 |
125,714 |
5,774,868 |
|||||||||||
|
Subtotal |
12,306,171 |
2,599,622 |
357,245 |
15,263,038 |
|||||||||||
|
Loss share receivable |
— |
— |
26,852 |
26,852 |
|||||||||||
|
Total loans |
12,306,171 |
2,599,622 |
384,097 |
15,289,890 |
|||||||||||
|
Less allowance for loan losses |
91,178 |
6,203 |
41,159 |
138,540 |
|||||||||||
|
Net loans |
$ |
12,214,993 |
$ |
2,593,419 |
$ |
342,938 |
$ |
15,151,350 |
|||||||
|
Three Months Ended September 30, 2014 | |||||||||||||||
|
Originated Loans |
Acquired Loans (1) |
FDIC Acquired Loans (2) |
Total Loans | ||||||||||||
|
C&I |
$ |
4,983,014 |
$ |
610,765 |
$ |
54,075 |
$ |
5,647,854 |
|||||||
|
CRE |
2,115,834 |
750,808 |
202,781 |
3,069,423 |
|||||||||||
|
Construction |
436,000 |
11,530 |
14,443 |
461,973 |
|||||||||||
|
Leases |
326,840 |
— |
— |
326,840 |
|||||||||||
|
Total Commercial |
7,861,688 |
1,373,103 |
271,299 |
9,506,090 |
|||||||||||
|
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 |
|||||||||||
|
Total Consumer |
3,952,626 |
1,514,971 |
136,174 |
5,603,771 |
|||||||||||
|
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 |
|||||||
|
(1) Loans assumed from Citizens. No allowance was brought forward on the date of acquisition in accordance with business combination accounting. |
|
(2) Loans acquired in an FDIC-assisted transaction. Includes non-single family loans for which the loss share agreement expired on March 31, 2015 and June 30, 2015. |
|
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, 2015 |
June 30, 2015 |
September 30, 2014 | ||||||||||||||||||||||||||||||
|
(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 |
$ |
457,317 |
$ |
518,820 |
$ |
521,210 |
||||||||||||||||||||||||||
|
Investment securities and federal funds sold: |
||||||||||||||||||||||||||||||||
|
U.S. treasury securities and U.S. government agency obligations (taxable) |
5,474,222 |
$ |
27,507 |
1.99 |
% |
5,452,598 |
$ |
27,098 |
1.99 |
% |
5,276,354 |
$ |
26,502 |
1.99 |
% | |||||||||||||||||
|
Obligations of states and political subdivisions (tax exempt) |
737,323 |
8,245 |
4.44 |
% |
724,653 |
8,443 |
4.67 |
% |
776,376 |
8,734 |
4.46 |
% | ||||||||||||||||||||
|
Other securities and federal funds sold |
572,376 |
5,134 |
3.56 |
% |
594,478 |
5,077 |
3.43 |
% |
585,980 |
5,571 |
3.77 |
% | ||||||||||||||||||||
|
Total investment securities and federal funds sold |
6,783,921 |
40,886 |
2.39 |
% |
6,771,729 |
40,618 |
2.41 |
% |
6,638,710 |
40,807 |
2.44 |
% | ||||||||||||||||||||
|
Loans held for sale |
4,929 |
66 |
5.31 |
% |
3,631 |
46 |
5.08 |
% |
17,433 |
154 |
3.50 |
% | ||||||||||||||||||||
|
Loans, including loss share receivable (2) |
15,760,127 |
162,903 |
4.10 |
% |
15,577,361 |
162,610 |
4.19 |
% |
15,148,100 |
171,302 |
4.49 |
% | ||||||||||||||||||||
|
Total earning assets |
22,548,977 |
$ |
203,855 |
3.59 |
% |
22,352,721 |
$ |
203,274 |
3.65 |
% |
21,804,243 |
$ |
212,263 |
3.86 |
% | |||||||||||||||||
|
Total allowance for loan losses |
(147,136) |
(146,558) |
(140,026) |
|||||||||||||||||||||||||||||
|
Other assets |
2,358,698 |
2,404,876 |
2,398,349 |
|||||||||||||||||||||||||||||
|
Total assets |
$ |
25,217,856 |
$ |
25,129,859 |
$ |
24,583,776 |
||||||||||||||||||||||||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||||||||||||||||||||||||
|
Deposits: |
||||||||||||||||||||||||||||||||
|
Noninterest-bearing |
$ |
5,897,768 |
$ |
— |
— |
% |
$ |
5,722,240 |
$ |
— |
— |
% |
$ |
5,603,104 |
$ |
— |
— |
% | ||||||||||||||
|
Interest-bearing |
3,353,541 |
750 |
0.09 |
% |
3,203,836 |
783 |
0.10 |
% |
3,100,904 |
755 |
0.10 |
% | ||||||||||||||||||||
|
Savings and money market accounts |
8,480,682 |
5,639 |
0.26 |
% |
8,467,845 |
5,588 |
0.26 |
% |
8,492,172 |
5,570 |
0.26 |
% | ||||||||||||||||||||
|
Certificates and other time deposits |
2,225,595 |
2,757 |
0.49 |
% |
2,288,741 |
2,510 |
0.44 |
% |
2,335,620 |
2,846 |
0.48 |
% | ||||||||||||||||||||
|
Total deposits |
19,957,586 |
9,146 |
0.18 |
% |
19,682,662 |
8,881 |
0.18 |
% |
19,531,800 |
9,171 |
0.19 |
% | ||||||||||||||||||||
|
Securities sold under agreements to repurchase |
1,109,924 |
254 |
0.09 |
% |
1,285,920 |
329 |
0.10 |
% |
1,182,507 |
268 |
0.09 |
% | ||||||||||||||||||||
|
Wholesale borrowings |
377,594 |
1,171 |
1.23 |
% |
393,379 |
1,129 |
1.15 |
% |
438,941 |
1,397 |
1.26 |
% | ||||||||||||||||||||
|
Long-term debt |
497,566 |
4,165 |
3.32 |
% |
508,744 |
3,917 |
3.09 |
% |
320,387 |
3,783 |
4.68 |
% | ||||||||||||||||||||
|
Total interest-bearing liabilities |
16,044,902 |
14,736 |
0.36 |
% |
16,148,465 |
14,256 |
0.35 |
% |
15,870,531 |
14,619 |
0.37 |
% | ||||||||||||||||||||
|
Other liabilities |
365,526 |
366,722 |
302,255 |
|||||||||||||||||||||||||||||
|
Shareholders' equity |
2,909,660 |
2,892,432 |
2,807,886 |
|||||||||||||||||||||||||||||
|
Total liabilities and shareholders' equity |
$ |
25,217,856 |
$ |
25,129,859 |
$ |
24,583,776 |
||||||||||||||||||||||||||
|
Net yield on earning assets |
$ |
22,548,977 |
$ |
189,119 |
3.33 |
% |
$ |
22,352,721 |
$ |
189,018 |
3.39 |
% |
$ |
21,804,243 |
$ |
197,644 |
3.60 |
% | ||||||||||||||
|
Interest rate spread |
3.23 |
% |
3.30 |
% |
3.50 |
% | ||||||||||||||||||||||||||
|
(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 U.S. generally accepted accounting principles in the Consolidated Statements of Income. The taxable-equivalent adjustments to net interest income were $3.8 million, $3.9 million, and $4.1 million for the three months ended September 30, 2015, June 30, 2015, and September 30, 2014, respectively. |
|
(2) Nonaccrual loans have been included in the average balances. |
|
FIRSTMERIT CORPORATION AND SUBIDARIES |
|||||||||||||||||||||
|
AVERAGE CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||
|
Fully Tax-equivalent Interest Rates and Interest Differential | |||||||||||||||||||||
|
Nine Months Ended |
Nine Months Ended | ||||||||||||||||||||
|
September 30, 2015 |
September 30, 2014 | ||||||||||||||||||||
|
(Unaudited) |
Average |
Average |
Average |
Average | |||||||||||||||||
|
(Dollars in thousands) |
Balance |
Interest (1) |
Rate |
Balance |
Interest (1) |
Rate | |||||||||||||||
|
ASSETS |
|||||||||||||||||||||
|
Cash and cash equivalents |
$ |
512,746 |
$ |
712,490 |
|||||||||||||||||
|
Investment securities and federal funds sold: |
|||||||||||||||||||||
|
U.S. treasury securities and U.S. government agency obligations (taxable) |
5,419,377 |
$ |
81,365 |
2.01 |
% |
5,244,238 |
$ |
79,162 |
2.02 |
% | |||||||||||
|
Obligations of states and political subdivisions (tax exempt) |
731,726 |
25,835 |
4.72 |
% |
761,461 |
26,100 |
4.58 |
% | |||||||||||||
|
Other securities and federal funds sold |
590,458 |
15,401 |
3.49 |
% |
587,622 |
17,185 |
3.91 |
% | |||||||||||||
|
Total investment securities and federal funds sold |
6,741,561 |
122,601 |
2.43 |
% |
6,593,321 |
122,447 |
2.48 |
% | |||||||||||||
|
Loans held for sale |
4,678 |
169 |
4.83 |
% |
11,517 |
302 |
3.51 |
% | |||||||||||||
|
Loans, including loss share receivable (2) |
15,589,444 |
487,805 |
4.18 |
% |
14,756,994 |
515,757 |
4.67 |
% | |||||||||||||
|
Total earning assets |
22,335,683 |
$ |
610,575 |
3.65 |
% |
21,361,832 |
$ |
638,506 |
4.00 |
% | |||||||||||
|
Total allowance for loan losses |
(146,029) |
(141,766) |
|||||||||||||||||||
|
Other assets |
2,381,209 |
2,405,097 |
|||||||||||||||||||
|
Total assets |
$ |
25,083,609 |
$ |
24,337,653 |
|||||||||||||||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||||||||||
|
Deposits: |
|||||||||||||||||||||
|
Noninterest-bearing |
$ |
5,783,542 |
$ |
— |
— |
% |
$ |
5,536,306 |
$ |
— |
— |
% | |||||||||
|
Interest-bearing |
3,256,082 |
2,300 |
0.09 |
% |
3,071,220 |
2,236 |
0.10 |
% | |||||||||||||
|
Savings and money market accounts |
8,496,668 |
16,774 |
0.26 |
% |
8,589,882 |
16,605 |
0.26 |
% | |||||||||||||
|
Certificates and other time deposits |
2,274,049 |
7,444 |
0.44 |
% |
2,357,241 |
8,319 |
0.47 |
% | |||||||||||||
|
Total deposits |
19,810,341 |
26,518 |
0.18 |
% |
19,554,649 |
27,160 |
0.19 |
% | |||||||||||||
|
Securities sold under agreements to repurchase |
1,140,547 |
826 |
0.10 |
% |
1,031,483 |
697 |
0.09 |
% | |||||||||||||
|
Wholesale borrowings |
374,085 |
3,459 |
1.24 |
% |
363,422 |
3,917 |
1.44 |
% | |||||||||||||
|
Long-term debt |
502,578 |
12,081 |
3.21 |
% |
323,068 |
11,566 |
4.79 |
% | |||||||||||||
|
Total interest-bearing liabilities |
16,044,009 |
42,884 |
0.36 |
% |
15,736,316 |
43,340 |
0.37 |
% | |||||||||||||
|
Other liabilities |
366,414 |
294,936 |
|||||||||||||||||||
|
Shareholders' equity |
2,889,644 |
2,770,095 |
|||||||||||||||||||
|
Total liabilities and shareholders' equity |
$ |
25,083,609 |
$ |
24,337,653 |
|||||||||||||||||
|
Net yield on earning assets |
$ |
22,335,683 |
$ |
567,691 |
3.40 |
% |
$ |
21,361,832 |
$ |
595,166 |
3.73 |
% | |||||||||
|
Interest rate spread |
3.29 |
% |
3.63 |
% | |||||||||||||||||
|
(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 $11.6 million and $12.1 million for the nine months ended September 30, 2015 and 2014, respectively. |
|
(2) Nonaccrual loans have been included in the average balances. |
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||||
|
(Unaudited) |
Three Months Ended |
Nine Months Ended | ||||||||||||||||
|
(In thousands, except per share amounts) |
September 30, |
September 30, | ||||||||||||||||
|
2015 |
2014 |
2015 |
2014 | |||||||||||||||
|
Interest income: |
||||||||||||||||||
|
Loans and loans held for sale |
$ |
162,204 |
$ |
170,648 |
$ |
485,615 |
$ |
513,678 |
||||||||||
|
Investment securities: |
||||||||||||||||||
|
Taxable |
32,641 |
32,072 |
96,766 |
96,347 |
||||||||||||||
|
Tax-exempt |
5,214 |
5,477 |
16,567 |
16,372 |
||||||||||||||
|
Total investment securities interest |
37,855 |
37,549 |
113,333 |
112,719 |
||||||||||||||
|
Total interest income |
200,059 |
208,197 |
598,948 |
626,397 |
||||||||||||||
|
Interest expense: |
||||||||||||||||||
|
Deposits: |
||||||||||||||||||
|
Interest-bearing |
750 |
755 |
2,300 |
2,236 |
||||||||||||||
|
Savings and money market accounts |
5,639 |
5,570 |
16,774 |
16,605 |
||||||||||||||
|
Certificates and other time deposits |
2,757 |
2,846 |
7,444 |
8,319 |
||||||||||||||
|
Federal funds purchased and securities sold under agreements to repurchase |
254 |
268 |
826 |
697 |
||||||||||||||
|
Wholesale borrowings |
1,171 |
1,397 |
3,459 |
3,917 |
||||||||||||||
|
Long-term debt |
4,165 |
3,783 |
12,081 |
11,566 |
||||||||||||||
|
Total interest expense |
14,736 |
14,619 |
42,884 |
43,340 |
||||||||||||||
|
Net interest income |
185,323 |
193,578 |
556,064 |
583,057 |
||||||||||||||
|
Provision for loan losses |
14,275 |
9,192 |
31,489 |
38,982 |
||||||||||||||
|
Net interest income after provision for loan losses |
171,048 |
184,386 |
524,575 |
544,075 |
||||||||||||||
|
Noninterest income: |
||||||||||||||||||
|
Trust department income |
10,948 |
10,300 |
31,917 |
30,118 |
||||||||||||||
|
Service charges on deposits |
17,295 |
18,684 |
49,667 |
53,860 |
||||||||||||||
|
Credit card fees |
13,939 |
13,754 |
40,712 |
39,361 |
||||||||||||||
|
ATM and other service fees |
6,518 |
6,182 |
18,962 |
17,998 |
||||||||||||||
|
Bank owned life insurance income |
4,622 |
4,218 |
11,911 |
11,840 |
||||||||||||||
|
Investment services and insurance |
4,032 |
3,606 |
11,607 |
10,974 |
||||||||||||||
|
Investment securities gains/(losses), net |
41 |
14 |
962 |
150 |
||||||||||||||
|
Loan sales and servicing income |
2,414 |
4,740 |
7,290 |
12,932 |
||||||||||||||
|
Other operating income |
11,617 |
8,235 |
30,827 |
32,331 |
||||||||||||||
|
Total noninterest income |
71,426 |
69,733 |
203,855 |
209,564 |
||||||||||||||
|
Noninterest expenses: |
||||||||||||||||||
|
Salaries, wages, pension and employee benefits |
85,772 |
90,593 |
262,318 |
269,071 |
||||||||||||||
|
Net occupancy expense |
13,540 |
13,887 |
43,221 |
45,248 |
||||||||||||||
|
Equipment expense |
12,235 |
12,188 |
35,852 |
36,366 |
||||||||||||||
|
Stationery, supplies and postage |
3,304 |
3,723 |
10,202 |
11,820 |
||||||||||||||
|
Bankcard, loan processing and other costs |
12,335 |
11,151 |
35,935 |
33,795 |
||||||||||||||
|
Professional services |
5,154 |
5,270 |
14,522 |
15,373 |
||||||||||||||
|
Amortization of intangibles |
2,598 |
2,933 |
7,794 |
8,802 |
||||||||||||||
|
FDIC insurance expense |
5,234 |
2,988 |
15,478 |
14,492 |
||||||||||||||
|
Other operating expense |
20,570 |
20,412 |
57,746 |
64,911 |
||||||||||||||
|
Total noninterest expenses |
160,742 |
163,145 |
483,068 |
499,878 |
||||||||||||||
|
Income before income tax expense |
81,732 |
90,974 |
245,362 |
253,761 |
||||||||||||||
|
Income tax expense |
22,720 |
27,076 |
72,627 |
76,889 |
||||||||||||||
|
Net income |
$ |
59,012 |
$ |
63,898 |
$ |
172,735 |
$ |
176,872 |
||||||||||
|
Less: |
Net income allocated to participating shareholders |
477 |
519 |
1,401 |
1,433 |
|||||||||||||
|
Preferred stock dividends |
1,469 |
1,469 |
4,407 |
4,407 |
||||||||||||||
|
Net income attributable to common shareholders |
$ |
57,066 |
$ |
61,910 |
$ |
166,927 |
$ |
171,032 |
||||||||||
|
Net income used in diluted EPS calculation |
$ |
57,066 |
$ |
61,910 |
$ |
166,927 |
$ |
171,032 |
||||||||||
|
Weighted average number of common shares outstanding - basic |
165,762 |
165,389 |
165,638 |
165,263 |
||||||||||||||
|
Weighted average number of common shares outstanding - diluted |
166,058 |
165,804 |
165,939 |
165,916 |
||||||||||||||
|
Basic earnings per common share |
$ |
0.34 |
$ |
0.37 |
$ |
1.01 |
$ |
1.03 |
||||||||||
|
Diluted earnings per common share |
0.34 |
0.37 |
1.01 |
1.03 |
||||||||||||||
|
Cash dividends per common share |
0.17 |
0.16 |
0.49 |
0.48 |
||||||||||||||
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|||||||||||||||||||||||
|
(Unaudited) |
Three Months Ended |
Nine Months Ended | |||||||||||||||||||||
|
(In thousands) |
September 30, 2015 |
September 30, 2015 | |||||||||||||||||||||
|
Pre-tax |
Tax |
After-tax |
Pre-tax |
Tax |
After-tax | ||||||||||||||||||
|
Net Income |
$ |
81,732 |
$ |
22,720 |
$ |
59,012 |
$ |
245,362 |
$ |
72,627 |
$ |
172,735 |
|||||||||||
|
Other comprehensive income/(loss) |
|||||||||||||||||||||||
|
Unrealized gains and losses on securities available for sale: |
|||||||||||||||||||||||
|
Changes in unrealized securities' holding gains/(losses) |
25,691 |
8,991 |
16,700 |
31,166 |
10,908 |
20,258 |
|||||||||||||||||
|
Changes in unrealized securities' holding gains/(losses) that result from securities being transferred from available-for-sale into held-to-maturity |
(1,266) |
(442) |
(824) |
(2,345) |
(821) |
(1,524) |
|||||||||||||||||
|
Net losses/(gains) realized on sale of securities reclassified to noninterest income |
(41) |
(14) |
(27) |
(962) |
(336) |
(626) |
|||||||||||||||||
|
Net change in unrealized gains/(losses) on securities available for sale |
24,384 |
8,535 |
15,849 |
27,859 |
9,751 |
18,108 |
|||||||||||||||||
|
Pension plans and other postretirement benefits: |
|||||||||||||||||||||||
|
Amortization of actuarial gain |
1,138 |
399 |
739 |
3,414 |
1,195 |
2,219 |
|||||||||||||||||
|
Amortization of prior service cost reclassified to other noninterest expense |
410 |
144 |
266 |
1,230 |
431 |
799 |
|||||||||||||||||
|
Net change from defined benefit pension plans |
1,548 |
543 |
1,005 |
4,644 |
1,626 |
3,018 |
|||||||||||||||||
|
Total other comprehensive gains/(losses) |
25,932 |
9,078 |
16,854 |
32,503 |
11,377 |
21,126 |
|||||||||||||||||
|
Comprehensive income |
$ |
107,664 |
$ |
31,798 |
$ |
75,866 |
$ |
277,865 |
$ |
84,004 |
$ |
193,861 |
|||||||||||
|
Three Months Ended |
Nine Months Ended | ||||||||||||||||||||||
|
September 30, 2014 |
September 30, 2014 | ||||||||||||||||||||||
|
Pre-tax |
Tax |
After-tax |
Pre-tax |
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 from available-for-sale into 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: |
|||||||||||||||||||||||
|
Amortization of actuarial gain |
768 |
269 |
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 |
1,284 |
450 |
834 |
4,012 |
1,404 |
2,608 |
|||||||||||||||||
|
Total other comprehensive gains/(losses) |
(15,500) |
(5,424) |
(10,076) |
26,604 |
9,311 |
17,293 |
|||||||||||||||||
|
Comprehensive income |
$ |
75,474 |
$ |
21,652 |
$ |
53,822 |
$ |
280,365 |
$ |
86,200 |
$ |
194,165 |
|||||||||||
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME---LINKED QUARTERS |
|||||||||||||||||||
|
Quarterly Results | |||||||||||||||||||
|
(In thousands, except per share amounts) |
2015 |
2015 |
2015 |
2014 |
2014 | ||||||||||||||
|
(Unaudited) |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
3rd qtr | ||||||||||||||
|
Interest Income: |
|||||||||||||||||||
|
Loans and loans held for sale |
$ |
162,204 |
$ |
161,872 |
$ |
161,539 |
$ |
168,650 |
$ |
170,648 |
|||||||||
|
Investment securities |
37,855 |
37,502 |
37,976 |
37,451 |
37,549 |
||||||||||||||
|
Total interest income |
200,059 |
199,374 |
199,515 |
206,101 |
208,197 |
||||||||||||||
|
Interest expense: |
|||||||||||||||||||
|
Deposits: |
|||||||||||||||||||
|
Interest-bearing |
750 |
783 |
767 |
727 |
755 |
||||||||||||||
|
Savings and money market accounts |
5,639 |
5,588 |
5,547 |
5,496 |
5,570 |
||||||||||||||
|
Certificates and other time deposits |
2,757 |
2,510 |
2,177 |
2,525 |
2,846 |
||||||||||||||
|
Federal funds purchased and securities sold under agreements to repurchase |
254 |
329 |
243 |
294 |
268 |
||||||||||||||
|
Wholesale borrowings |
1,171 |
1,129 |
1,160 |
1,292 |
1,397 |
||||||||||||||
|
Long-term debt |
4,165 |
3,917 |
3,998 |
3,256 |
3,783 |
||||||||||||||
|
Total interest expense |
14,736 |
14,256 |
13,892 |
13,590 |
14,619 |
||||||||||||||
|
Net interest income |
185,323 |
185,118 |
185,623 |
192,511 |
193,578 |
||||||||||||||
|
Provision for loan losses |
14,275 |
8,966 |
8,248 |
13,297 |
9,192 |
||||||||||||||
|
Net interest income after provision for loan losses |
171,048 |
176,152 |
177,375 |
179,214 |
184,386 |
||||||||||||||
|
Noninterest income: |
|||||||||||||||||||
|
Trust department income |
10,948 |
10,820 |
10,149 |
9,831 |
10,300 |
||||||||||||||
|
Service charges on deposits |
17,295 |
16,704 |
15,668 |
17,597 |
18,684 |
||||||||||||||
|
Credit card fees |
13,939 |
14,124 |
12,649 |
13,305 |
13,754 |
||||||||||||||
|
ATM and other service fees |
6,518 |
6,345 |
6,099 |
6,181 |
6,182 |
||||||||||||||
|
Bank owned life insurance income |
4,622 |
3,697 |
3,592 |
7,337 |
4,218 |
||||||||||||||
|
Investment services and insurance |
4,032 |
3,871 |
3,704 |
4,171 |
3,606 |
||||||||||||||
|
Investment securities gains/(losses), net |
41 |
567 |
354 |
16 |
14 |
||||||||||||||
|
Loan sales and servicing income |
2,414 |
3,276 |
1,600 |
3,112 |
4,740 |
||||||||||||||
|
Other operating income |
11,617 |
7,178 |
12,032 |
10,410 |
8,235 |
||||||||||||||
|
Total noninterest income |
71,426 |
66,582 |
65,847 |
71,960 |
69,733 |
||||||||||||||
|
Noninterest expenses: |
|||||||||||||||||||
|
Salaries, wages, pension and employee benefits |
85,772 |
86,020 |
90,526 |
89,899 |
90,593 |
||||||||||||||
|
Net occupancy expense |
13,540 |
13,727 |
15,954 |
14,188 |
13,887 |
||||||||||||||
|
Equipment expense |
12,235 |
12,592 |
11,025 |
12,133 |
12,188 |
||||||||||||||
|
Stationery, supplies and postage |
3,304 |
3,370 |
3,528 |
3,767 |
3,723 |
||||||||||||||
|
Bankcard, loan processing and other costs |
12,335 |
12,461 |
11,139 |
11,830 |
11,151 |
||||||||||||||
|
Professional services |
5,154 |
5,358 |
4,010 |
6,440 |
5,270 |
||||||||||||||
|
Amortization of intangibles |
2,598 |
2,598 |
2,598 |
2,933 |
2,933 |
||||||||||||||
|
FDIC insurance expense |
5,234 |
5,077 |
5,167 |
5,989 |
2,988 |
||||||||||||||
|
Other operating expense |
20,570 |
20,471 |
16,705 |
17,862 |
20,412 |
||||||||||||||
|
Total noninterest expenses |
160,742 |
161,674 |
160,652 |
165,041 |
163,145 |
||||||||||||||
|
Income before income tax expense |
81,732 |
81,060 |
82,570 |
86,133 |
90,974 |
||||||||||||||
|
Income tax expense |
22,720 |
24,476 |
25,431 |
25,054 |
27,076 |
||||||||||||||
|
Net income |
59,012 |
56,584 |
57,139 |
61,079 |
63,898 |
||||||||||||||
|
Less: Net income allocated to participating shareholders |
477 |
467 |
407 |
496 |
519 |
||||||||||||||
|
Preferred stock dividends |
1,469 |
1,469 |
1,469 |
1,469 |
1,469 |
||||||||||||||
|
Net income attributable to common shareholders |
$ |
57,066 |
$ |
54,648 |
$ |
55,263 |
$ |
59,114 |
$ |
61,910 |
|||||||||
|
Net income used in diluted EPS calculation |
$ |
57,066 |
$ |
54,648 |
$ |
55,263 |
$ |
59,114 |
$ |
61,910 |
|||||||||
|
Weighted-average number of common shares outstanding - basic |
165,762 |
165,736 |
165,411 |
165,395 |
165,389 |
||||||||||||||
|
Weighted-average number of common shares outstanding- diluted |
166,058 |
166,277 |
166,003 |
165,974 |
165,804 |
||||||||||||||
|
Basic earnings per common share |
$ |
0.34 |
$ |
0.33 |
$ |
0.33 |
$ |
0.36 |
$ |
0.37 |
|||||||||
|
Diluted earnings per common share |
$ |
0.34 |
$ |
0.33 |
$ |
0.33 |
$ |
0.36 |
$ |
0.37 |
|||||||||
|
Cash dividends per common share |
$ |
0.17 |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
$ |
0.16 |
|||||||||
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES |
||||||||||||||||||||
|
NONINTEREST INCOME AND NONINTEREST EXPENSE DETAIL |
||||||||||||||||||||
|
(Unaudited) |
||||||||||||||||||||
|
(In thousands) |
||||||||||||||||||||
|
2015 |
2015 |
2015 |
2014 |
2014 | ||||||||||||||||
|
Noninterest income detail |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
3rd qtr | |||||||||||||||
|
Trust department income |
$ |
10,948 |
$ |
10,820 |
$ |
10,149 |
$ |
9,831 |
$ |
10,300 |
||||||||||
|
Service charges on deposits |
17,295 |
16,704 |
15,668 |
17,597 |
18,684 |
|||||||||||||||
|
Credit card fees |
13,939 |
14,124 |
12,649 |
13,305 |
13,754 |
|||||||||||||||
|
ATM and other service fees |
6,518 |
6,345 |
6,099 |
6,181 |
6,182 |
|||||||||||||||
|
Bank owned life insurance income |
4,622 |
3,697 |
3,592 |
7,337 |
4,218 |
|||||||||||||||
|
Investment services and insurance |
4,032 |
3,871 |
3,704 |
4,171 |
3,606 |
|||||||||||||||
|
Investment securities gains/(losses), net |
41 |
567 |
354 |
16 |
14 |
|||||||||||||||
|
Loan sales and servicing income |
2,414 |
3,276 |
1,600 |
3,112 |
4,740 |
|||||||||||||||
|
Other operating income |
11,617 |
7,178 |
12,032 |
10,410 |
8,235 |
|||||||||||||||
|
Total Noninterest Income |
$ |
71,426 |
$ |
66,582 |
$ |
65,847 |
$ |
71,960 |
$ |
69,733 |
||||||||||
|
2015 |
2015 |
2015 |
2014 |
2014 | ||||||||||||||||
|
Noninterest expense detail |
3rd qtr |
2nd qtr |
1st qtr |
4th qtr |
3rd qtr | |||||||||||||||
|
Salaries and wages |
$ |
68,775 |
$ |
67,485 |
$ |
71,914 |
$ |
71,638 |
$ |
71,769 |
||||||||||
|
Pension and employee benefits |
16,997 |
18,535 |
18,612 |
18,261 |
18,824 |
|||||||||||||||
|
Net occupancy expense |
13,540 |
13,727 |
15,954 |
14,188 |
13,887 |
|||||||||||||||
|
Equipment expense |
12,235 |
12,592 |
11,025 |
12,133 |
12,188 |
|||||||||||||||
|
Taxes, other than federal income taxes |
2,003 |
2,032 |
2,014 |
1,661 |
1,286 |
|||||||||||||||
|
Stationery, supplies and postage |
3,304 |
3,370 |
3,528 |
3,767 |
3,723 |
|||||||||||||||
|
Bankcard, loan processing and other costs |
12,335 |
12,461 |
11,139 |
11,830 |
11,151 |
|||||||||||||||
|
Advertising |
4,278 |
3,103 |
2,747 |
3,586 |
3,942 |
|||||||||||||||
|
Professional services |
5,154 |
5,358 |
4,010 |
6,440 |
5,270 |
|||||||||||||||
|
Telephone |
2,480 |
2,599 |
2,574 |
2,779 |
2,831 |
|||||||||||||||
|
Amortization of intangibles |
2,598 |
2,598 |
2,598 |
2,933 |
2,933 |
|||||||||||||||
|
FDIC insurance expense |
5,234 |
5,077 |
5,167 |
5,989 |
2,988 |
|||||||||||||||
|
Other operating expense |
11,809 |
12,737 |
9,370 |
9,836 |
12,353 |
|||||||||||||||
|
Total Noninterest Expense |
$ |
160,742 |
$ |
161,674 |
$ |
160,652 |
$ |
165,041 |
$ |
163,145 |
||||||||||
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||
|
ASSET QUALITY INFORMATION (excluding acquired loans, FDIC acquired loans, and covered OREO) (1) | |||||||||||||||||||||||
|
(Unaudited) |
(Unaudited) |
(Audited) | |||||||||||||||||||||
|
(Dollars in thousands) |
Quarterly Periods |
Annual Period | |||||||||||||||||||||
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
December 31, | ||||||||||||||||||
|
Allowance for Credit Losses |
2015 |
2015 |
2015 |
2014 |
2014 |
2014 | |||||||||||||||||
|
Allowance for originated loan losses, beginning of period |
$ |
101,682 |
$ |
97,545 |
$ |
95,696 |
$ |
90,883 |
$ |
91,950 |
$ |
96,484 |
|||||||||||
|
Provision for originated loan losses |
10,402 |
10,809 |
6,036 |
8,662 |
4,862 |
23,171 |
|||||||||||||||||
|
Charge-offs |
13,398 |
11,298 |
8,567 |
9,205 |
11,410 |
44,923 |
|||||||||||||||||
|
Recoveries |
5,369 |
4,626 |
4,380 |
5,356 |
5,481 |
20,964 |
|||||||||||||||||
|
Net charge-offs |
8,029 |
6,672 |
4,187 |
3,849 |
5,929 |
23,959 |
|||||||||||||||||
|
Allowance for originated loan losses, end of period |
$ |
104,055 |
$ |
101,682 |
$ |
97,545 |
$ |
95,696 |
$ |
90,883 |
$ |
95,696 |
|||||||||||
|
Reserve for unfunded lending commitments, |
|||||||||||||||||||||||
|
beginning of period |
$ |
3,905 |
$ |
4,330 |
$ |
5,848 |
$ |
6,966 |
$ |
7,107 |
$ |
7,907 |
|||||||||||
|
Provision for (relief of) credit losses |
(331) |
(425) |
(1,518) |
(1,118) |
(141) |
(2,059) |
|||||||||||||||||
|
Reserve for unfunded lending commitments, |
|||||||||||||||||||||||
|
end of period |
$ |
3,574 |
$ |
3,905 |
$ |
4,330 |
$ |
5,848 |
$ |
6,966 |
$ |
5,848 |
|||||||||||
|
Allowance for Credit Losses |
$ |
107,629 |
$ |
105,587 |
$ |
101,875 |
$ |
101,544 |
$ |
97,849 |
$ |
101,544 |
|||||||||||
|
Ratios |
|||||||||||||||||||||||
|
Provision for loan losses to average loans |
0.31 |
% |
0.33 |
% |
0.19 |
% |
0.28 |
% |
0.16 |
% |
0.20 |
% | |||||||||||
|
Net charge-offs to average loans |
0.24 |
% |
0.20 |
% |
0.13 |
% |
0.12 |
% |
0.20 |
% |
0.21 |
% | |||||||||||
|
Allowance for loan losses to period-end loans |
0.76 |
% |
0.76 |
% |
0.76 |
% |
0.77 |
% |
0.75 |
% |
0.77 |
% | |||||||||||
|
Allowance for credit losses to period-end loans |
0.79 |
% |
0.79 |
% |
0.79 |
% |
0.81 |
% |
0.81 |
% |
0.81 |
% | |||||||||||
|
Allowance for loan losses to nonperforming loans |
221.22 |
% |
184.40 |
% |
211.66 |
% |
276.44 |
% |
231.13 |
% |
276.44 |
% | |||||||||||
|
Allowance for credit losses to nonperforming loans |
228.82 |
% |
191.48 |
% |
221.06 |
% |
293.34 |
% |
248.85 |
% |
293.34 |
% | |||||||||||
|
Asset Quality |
|||||||||||||||||||||||
|
Impaired originated loans: |
|||||||||||||||||||||||
|
Commercial loans |
$ |
30,821 |
$ |
37,889 |
$ |
28,478 |
$ |
17,147 |
$ |
22,347 |
$ |
17,147 |
|||||||||||
|
Consumer loans |
16,215 |
17,253 |
17,607 |
17,470 |
16,974 |
17,470 |
|||||||||||||||||
|
Total nonperforming loans |
47,036 |
55,142 |
46,085 |
34,617 |
39,321 |
34,617 |
|||||||||||||||||
|
Other real estate owned ("OREO"), noncovered (2) |
60,022 |
62,169 |
22,521 |
20,421 |
23,798 |
20,421 |
|||||||||||||||||
|
Total nonperforming assets ("NPAs") (2) |
$ |
107,058 |
$ |
117,311 |
$ |
68,606 |
$ |
55,038 |
$ |
63,119 |
$ |
55,038 |
|||||||||||
|
NPAs to period-end loans + noncovered OREO (2) |
0.78 |
% |
0.87 |
% |
0.53 |
% |
0.44 |
% |
0.52 |
% |
0.44 |
% | |||||||||||
|
Accruing originated loans past due 90 days or more |
$ |
9,888 |
$ |
8,009 |
$ |
7,914 |
$ |
12,156 |
$ |
8,538 |
$ |
12,156 |
|||||||||||
|
(1) Due to the impact of business combination accounting and the protection afforded by FDIC loss sharing agreements, which provide considerable protection against credit risk, acquired loans and FDIC acquired loans, and covered OREO are excluded from this table to provide for improved comparability to prior periods and better perspective into asset quality trends. George Washington and Midwest non-single family loss share agreements with the FDIC expired at March 31, 2015 and June 30, 2015. As of September 30, 2015, $85.9 million of FDIC acquired loans remained covered by single family loss share agreements, providing considerable protection against credit risk. |
|
(2) As of September 30, 2015 and June 30, 2015, $40.0 million and $42.0 million, respectively, of OREO was no longer covered by FDIC loss share agreements, and therefore, was included in NPAs. OREO that remains covered by FDIC loss share agreements has considerable protection against credit risk and is not reported as NPAs. |
|
FIRSTMERIT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||
|
ALLOWANCE FOR ORIGINATED LOAN LOSSES - Net Charge-off Detail (excluding acquired and FDIC acquired loans) (1) | |||||||||||||||||||
|
(Unaudited) |
Three Months Ended |
Nine Months Ended |
Year Ended | ||||||||||||||||
|
(Dollars in thousands) |
September 30, |
September 30, |
December 31, | ||||||||||||||||
|
2015 |
2014 |
2015 |
2014 |
2014 | |||||||||||||||
|
Allowance for originated loan losses - beginning of period |
$ |
101,682 |
$ |
91,950 |
$ |
95,696 |
$ |
96,484 |
$ |
96,484 |
|||||||||
|
Loans charged off: |
|||||||||||||||||||
|
Commercial |
4,476 |
4,046 |
8,738 |
12,256 |
12,701 |
||||||||||||||
|
Mortgage |
409 |
91 |
1,206 |
1,484 |
2,031 |
||||||||||||||
|
Installment |
4,456 |
4,323 |
13,682 |
12,983 |
17,932 |
||||||||||||||
|
Home equity |
940 |
1,361 |
2,822 |
3,403 |
4,831 |
||||||||||||||
|
Credit cards |
1,173 |
778 |
3,834 |
3,544 |
4,604 |
||||||||||||||
|
Leases |
1,268 |
— |
1,268 |
— |
— |
||||||||||||||
|
Overdrafts |
676 |
811 |
1,713 |
2,048 |
2,824 |
||||||||||||||
|
Total |
13,398 |
11,410 |
33,263 |
35,718 |
44,923 |
||||||||||||||
|
Recoveries: |
|||||||||||||||||||
|
Commercial |
759 |
1,287 |
1,532 |
2,720 |
4,332 |
||||||||||||||
|
Mortgage |
80 |
114 |
204 |
219 |
318 |
||||||||||||||
|
Installment |
2,774 |
2,729 |
8,358 |
8,195 |
10,513 |
||||||||||||||
|
Home equity |
564 |
708 |
2,016 |
2,227 |
2,940 |
||||||||||||||
|
Credit cards |
331 |
403 |
1,055 |
1,260 |
1,716 |
||||||||||||||
|
Manufactured housing |
7 |
54 |
26 |
78 |
87 |
||||||||||||||
|
Leases |
730 |
2 |
737 |
374 |
379 |
||||||||||||||
|
Overdrafts |
124 |
184 |
447 |
535 |
679 |
||||||||||||||
|
Total |
5,369 |
5,481 |
14,375 |
15,608 |
20,964 |
||||||||||||||
|
Net charge-offs |
8,029 |
5,929 |
18,888 |
20,110 |
23,959 |
||||||||||||||
|
Provision for originated loan losses |
10,402 |
4,862 |
27,247 |
14,509 |
23,171 |
||||||||||||||
|
Allowance for originated loan losses-end of period |
$ |
104,055 |
$ |
90,883 |
$ |
104,055 |
$ |
90,883 |
$ |
95,696 |
|||||||||
|
Average originated loans |
$ |
13,528,268 |
$ |
11,814,314 |
$ |
13,106,749 |
$ |
11,123,269 |
$ |
11,421,426 |
|||||||||
|
Ratio (annualized) to average originated loans: |
|||||||||||||||||||
|
Originated net charge-offs |
0.24 |
% |
0.20 |
% |
0.19 |
% |
0.24 |
% |
0.21 |
% | |||||||||
|
Provision for originated loan losses |
0.31 |
% |
0.16 |
% |
0.28 |
% |
0.17 |
% |
0.20 |
% | |||||||||
|
Originated Loans, period-end |
$ |
13,648,325 |
$ |
12,071,759 |
$ |
13,648,325 |
$ |
12,071,759 |
$ |
12,493,812 |
|||||||||
|
Allowance for credit losses: |
$ |
107,629 |
$ |
97,849 |
$ |
107,629 |
$ |
97,849 |
$ |
101,544 |
|||||||||
|
To (annualized) net charge-offs |
3.38 |
4.16 |
4.26 |
3.64 |
4.24 |
||||||||||||||
|
Allowance for originated loan losses: |
|||||||||||||||||||
|
To period-end originated loans |
0.76 |
% |
0.75 |
% |
0.76 |
% |
0.75 |
% |
0.77 |
% | |||||||||
|
To (annualized) net originated charge-offs |
3.27 |
3.86 |
4.12 |
3.38 |
3.99 |
||||||||||||||
|
(1) Due to the impact of business combination accounting and protection of FDIC loss sharing agreements, which provide considerable protection against credit risk, acquired and FDIC acquired loans are excluded from this table to provide for improved comparability to prior periods and better perspective into asset quality trends. George Washington and Midwest non-single family loss share agreements with the FDIC expired at March 31, 2015 and June 30, 2015. As of September 30, 2015, $85.9 million of FDIC acquired loans remained covered by single family loss share agreements, providing considerable protection against credit risk. |
FirstMerit CorporationAnalyst: Thomas O'Malley/Investor Relations OfficerPhone: 330.384.7109 Media Contact: Robert Townsend/Media Relations OfficerPhone: 330.384.7075
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SOURCE FirstMerit Corporation
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