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22.10.2013 13:30:00
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FirstMerit Reports Third Quarter 2013 EPS of $0.23 Per Share
AKRON, Ohio, Oct. 22, 2013 /PRNewswire/ --
Quarterly Highlights include:
- Sustained profitability: 58th consecutive quarter of profitability.
- Continued organic growth: Average loan growth of $444.0 million, or 3.25% from the prior quarter; average core deposit growth of $1.1 billion or 6.91% from the prior quarter.
- Superior credit quality: Net charge-offs to average originated loans decreased to 0.12% from 0.15% in the prior quarter; nonperforming assets as a percent of period end originated loans plus other real estate remained low at 0.57%.
- Strong balance sheet: Strong tangible common equity ratio at 7.44%.
- Continued integration of Citizens Republic Bancorp: Successful conversion of core systems in October.
FirstMerit Corporation (Nasdaq: FMER) (the "Corporation") reported third quarter 2013 net income of $40.7 million, or $0.23 per diluted share. This compares with $48.5 million, or $0.29 per diluted share, for the second quarter 2013 and $35.0 million, or $0.32 per diluted share, for the third quarter 2012. Included in net income for the third quarter 2013 were $33.4 million of one time pre-tax merger related costs that were recorded as noninterest expense. One time pre-tax merger related costs for the second quarter 2013 totaled $32.1 million of which $2.8 million was recorded as a reduction to noninterest income and $29.3 million was recorded as noninterest expense.
(Logo: http://photos.prnewswire.com/prnh/20070920/CLTU138LOGO )
Returns on average common equity ("ROE") and average assets ("ROA") for the third quarter 2013 were 6.07% and 0.67%, respectively, compared with 7.56% and 0.85%, respectively, for the second quarter 2013 and 8.60% and 0.94%, respectively, for the third quarter 2012.
"Our strong financial results in the third quarter reflect solid performance throughout the company with characteristic focus and dedication at all levels, demonstrated by organic loan and deposit growth. This past weekend, we successfully converted Citizens Republic Bancorp's operating systems onto our platform. We now operate across our five-state footprint as one bank operating with unified systems and procedures from the front of the house to the back. With this last milestone behind us, we are actively working to take market share in all of our markets, grow our business and enhance shareholder value," said Paul Greig, chairman, president and CEO, FirstMerit Corporation.
Except as noted, the Citizens Republic Bancorp ("Citizens") acquisition is primarily contributing to the increases over the prior year period in the income statement and balance sheets. Citizens' results of operations are included in the reported current year to date period results since the date of acquisition, April 12, 2013.
"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 ("FTE") basis was $207.1 million in the third quarter 2013 compared with $201.6 million in the second quarter 2013 and $120.7 million in the third quarter 2012.
Net interest margin was 4.05% for the third quarter 2013 compared with 4.12% for the second quarter 2013 and 3.66% for the third quarter 2012. Third quarter 2013 net interest margin compression compared with the second quarter 2013 was primarily driven by lower yields in the acquired loan portfolio and lower volume from the run off in the covered loan portfolio. Reduced funding costs within average deposits offset additional margin pressure during the quarter.
Average originated loans were $9.4 billion during the third quarter 2013, an increase of $500.1 million, or 5.63%, compared with the second quarter 2013, and an increase of $1.2 billion, or 14.57%, compared with the third quarter 2012. Average originated commercial loans increased $242.5 million, or 4.12%, compared with the prior quarter, and increased $687.7 million, or 12.63%, compared with the year ago quarter.
Average deposits were $19.5 billion during the third quarter 2013, an increase of $1.1 billion, or 6.12%, compared with the second quarter 2013, and an increase of $7.9 billion, or 67.84%, compared with the third quarter 2012. During the third quarter 2013, average core deposits, which exclude time deposits, increased $1.1 billion, or 6.91%, compared with the second quarter 2013 and increased $6.7 billion, or 66.29%, compared with the third quarter 2012. Average time deposits increased $40.6 million, or 1.51%, and increased $1.2 billion, or 78.05%, respectively, over the prior and year-ago quarters. For the third quarter 2013, average core deposits accounted for 86.02% of total average deposits, compared with 85.38% for the second quarter 2013 and 86.82% for the third quarter 2012.
Average investments increased $222.0 million, or 3.74%, compared with the second quarter 2013 and increased $2.5 billion, or 66.55% compared with the third quarter 2012.
Noninterest Income
Noninterest income, excluding gains and losses on securities transactions, for the third quarter 2013 was $71.1 million, a decrease of $1.1 million, or 1.58%, from the second quarter 2013 and an increase of $16.7 million, or 30.75%, from the third quarter 2012. Included in noninterest income in the third quarter 2013, second quarter 2013 and were approximately $1.8 million and $1.0 million. There were no gains on covered loans paid in full in the third quarter 2012.
Other income, excluding net securities gains and losses, as a percentage of net revenue for the third quarter 2013 was 25.56% compared with 26.38% for second quarter 2013 and 31.05% for the third quarter 2012. Net revenue is defined as net interest income, on an FTE basis, plus other income, excluding gains and losses from securities sales.
Noninterest Expense
Noninterest expense for the third quarter 2013 was $211.4 million, an increase of $21.7 million, or 11.46%, from the second quarter 2013 and an increase of $102.8 million, or 94.66%, from the third quarter 2012. Included in noninterest expense in the third quarter 2013 and second quarter 2013 were one time merger related costs associated with the Citizens acquisition of $33.4 million and $29.3 million, respectively. The majority of the merger related costs incurred in the third quarter 2013 are from fees for early termination of existing agreements assumed from the merger and are included within Bankcard, loan processing and other costs in the accompanying consolidated statements of comprehensive income. The majority of the merger related costs incurred in the second quarter of 2013 were associated with severance arrangements and professional and legal services rendered in connection with the merger. The Corporation's efficiency ratio was 74.92% for the third quarter 2013, compared with 68.37% for the second quarter 2013 and 61.75% for the third quarter 2012.
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 $2.9 million, or 0.12% of average originated loans in the third quarter 2013, compared with $3.3 million, or 0.15% of average originated loans, in the second quarter 2013 and $14.9 million, or 0.72% of average originated loans, in the third quarter 2012.
Nonperforming assets totaled $55.4 million at September 30, 2013, a decrease of $10.8 million, or 16.25%, compared with June 30, 2013 and a decrease of $8.6 million, or 13.47%, compared with September 30, 2012. Nonperforming assets at September 30, 2013 represented 0.57% of period-end originated loans plus other real estate compared with 0.72% at June 30, 2013 and 0.77% at September 30, 2012.
The allowance for originated loan losses totaled $98.3 million at September 30, 2013. At September 30, 2013, the allowance for originated loan losses was 1.00% of period-end originated loans compared with 1.08% at June 30, 2013 and 1.19% at September 30, 2012. 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 1.09% of period end originated loans at September 30, 2013, compared with 1.17% at June 30, 2013 and 1.26% at September 30, 2012. The allowance for credit losses to nonperforming loans was 300.06% at September 30, 2013, compared with 234.82% at June 30, 2013 and 208.11% at September 30, 2012.
Balance Sheet
The Corporation's total assets at September 30, 2013 were $24.1 billion, an increase of $602.9 million, or 2.56%, compared with June 30, 2013 and an increase of $9.5 billion, or 64.98%, compared with September 30, 2012.
Total deposits were $19.5 billion at September 30, 2013, an increase of $369.8 million, or 1.93%, from June 30, 2013 and an increase of $8.0 billion, or 69.00%, from September 30, 2012. Core deposits totaled $16.9 billion at September 30, 2013, an increase of $549.8 million, or 3.37%, from June 30, 2013 and an increase of $6.8 billion, or 67.60%, from September 30, 2012.
Shareholders' equity was $2.7 billion as of September 30, 2013 and June 30, 2013 and $1.6 billion as of September 30, 2012. The increases mainly reflect the addition of $928.3 million in equity from the Citizen acquisition. The Corporation maintained a strong capital position as tangible common equity to assets was 7.44% at September 30, 2013, compared with 7.61% at June 30, 2013 and 8.18% at September 30, 2012. The common cash dividend per share paid in the third quarter 2013 was $0.16.
Integration Update
The integration of Citizens into the Corporation continues to progress as scheduled. Professional consulting groups have been assisting the Corporation with the integration and accounting matters related to the transaction. Core operating systems were converted as of October 20, 2013.
One time merger related costs incurred through September 30, 2013 totaled approximately $72.1 million. Management expects a total of approximately $78.1 million in one time pre-tax merger related costs related to the Citizens acquisition.
Third Quarter 2013 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: 79710266. A replay of the conference call will be available at approximately 2:00 p.m. (Eastern Time) on October 22, 2013 through November 5, 2013 by dialing (855) 859-2056, and entering the PIN: 79710266. 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 $24.1 billion as of September 30, 2013, and 412 banking offices and 440 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, FirstMerit Title Agency, Ltd., and FirstMerit Community Development Corporation.
Subsequent Events
The Corporation is required under generally accepted accounting principles to evaluate subsequent events through the filing of the its consolidated financial statements for the quarter ended September 30, 2013 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, 2013 and will adjust amounts preliminarily reported, if necessary.
Forward-Looking Statements
This release contains forward-looking statements relating to present or future trends or factors affecting the banking industry, and specifically the financial condition and results of operations, including without limitation, statements relating to the earnings outlook of the Corporation, as well as its operations, markets and products. Actual results could differ materially from those indicated. Among the important factors that could cause results to differ materially are interest rate changes, continued softening in the economy, which could materially impact credit quality trends and the ability to generate loans, changes in the mix of the Corporation's business, competitive pressures, changes in accounting, tax or regulatory practices or requirements, 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 and registration statements filed with the Securities and Exchange Commission. The Corporation undertakes no obligation to release revisions to these forward-looking statements or reflect events or circumstances after the date of this release.
FirstMerit Corporation
Analysts: Thomas O'Malley/Investor Relations Officer
Phone: 330.384.7109
Media Contact: Robert Townsend/Media Relations Officer
Phone: 330.384.7075
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||
Consolidated Financial Highlights (a) | |||||||||||||||
(Unaudited) | Quarters | ||||||||||||||
(Dollars in thousands, except per share amounts) | 2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||
3rd qtr | 2nd qtr | 1st qtr | 4th qtr | 3rd qtr | |||||||||||
EARNINGS | |||||||||||||||
Net interest income FTE (b) | $ | 207,079 | $ | 201,605 | $ | 114,376 | $ | 119,130 | $ | 120,741 | |||||
FTE adjustment (b) | 3,739 | 3,574 | 3,027 | 2,900 | 2,851 | ||||||||||
Provision for originated loan losses | 2,523 | 3,151 | 5,808 | 7,116 | 9,965 | ||||||||||
Provision for acquired loan losses | 2,033 | — | — | — | — | ||||||||||
Provision for covered loan losses | 1,823 | 4,158 | 4,138 | 5,146 | 6,214 | ||||||||||
Other income | 71,090 | 69,439 | 57,392 | 61,652 | 54,925 | ||||||||||
Other expenses | 211,378 | 189,640 | 106,925 | 112,181 | 108,587 | ||||||||||
Net income | 40,715 | 48,450 | 37,346 | 38,224 | 34,953 | ||||||||||
Diluted EPS (d) | 0.23 | 0.29 | 0.33 | 0.35 | 0.32 | ||||||||||
PERFORMANCE RATIOS | |||||||||||||||
Return on average assets (ROA) | 0.67 | % | 0.85 | % | 1.01 | % | 1.03 | % | 0.94 | % | |||||
Return on average equity (ROE) | 6.07 | % | 7.56 | % | 8.83 | % | 9.30 | % | 8.60 | % | |||||
Return on average tangible common equity (e) | 9.29 | % | 11.49 | % | 12.76 | % | 13.01 | % | 12.10 | % | |||||
Net interest margin FTE (b) | 4.05 | % | 4.12 | % | 3.46 | % | 3.58 | % | 3.66 | % | |||||
Efficiency ratio (f) | 74.92 | % | 68.37 | % | 62.06 | % | 62.65 | % | 61.75 | % | |||||
Number of full-time equivalent employees | 4,666 | 4,619 | 2,767 | 2,738 | 2,733 | ||||||||||
MARKET DATA | |||||||||||||||
Book value per share | $ | 16.08 | $ | 16.06 | $ | 15.99 | $ | 15.00 | $ | 14.82 | |||||
Tangible book value per share (e) | $ | 10.51 | 10.47 | 10.83 | 10.75 | 10.56 | |||||||||
Period-end common share market value | 21.72 | 20.03 | 16.54 | 14.19 | 14.71 | ||||||||||
Market as a % of book | 135 | % | 125 | % | 103 | % | 95 | % | 99 | % | |||||
Cash dividends per common share | $ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.16 | $ | 0.16 | |||||
Common stock dividend payout ratio | 69.57 | % | 55.17 | % | 48.48 | % | 45.71 | % | 50.00 | % | |||||
Average basic common shares | 165,044 | 157,863 | 109,689 | 109,652 | 109,645 | ||||||||||
Average diluted common shares | 168,917 | 157,982 | 109,689 | 109,652 | 109,645 | ||||||||||
Period end common shares | 165,045 | 165,045 | 109,746 | 109,649 | 109,653 | ||||||||||
Common shares repurchased | 7 | 168 | 26 | 12 | 6 | ||||||||||
Common stock market capitalization | $ | 3,584,777 | $ | 3,305,851 | $ | 1,815,199 | $ | 1,555,919 | $ | 1,612,996 | |||||
ASSET QUALITY (excluding acquired and covered loans) (c) | |||||||||||||||
Gross charge-offs | $ | 8,515 | $ | 10,969 | $ | 10,776 | $ | 12,475 | $ | 20,999 | |||||
Net charge-offs | 2,877 | 3,349 | 5,907 | 7,116 | 14,872 | ||||||||||
Allowance for originated loan losses | 98,291 | 98,645 | 98,843 | 98,942 | 98,942 | ||||||||||
Reserve for unfunded lending commitments | 8,493 | 8,114 | 4,941 | 5,433 | 5,760 | ||||||||||
Nonperforming assets (NPAs) | 55,426 | 66,177 | 52,231 | 50,224 | 64,055 | ||||||||||
Net charge-offs to average loans ratio | 0.12 | % | 0.15 | % | 0.27 | % | 0.34 | % | 0.72 | % | |||||
Allowance for originated loan losses to period-end loans | 1.00 | % | 1.08 | % | 1.13 | % | 1.13 | % | 1.19 | % | |||||
Allowance for credit losses to period-end loans | 1.09 | % | 1.17 | % | 1.18 | % | 1.20 | % | 1.26 | % | |||||
NPAs to loans and other real estate | 0.57 | % | 0.72 | % | 0.59 | % | 0.57 | % | 0.77 | % | |||||
Allowance for originated loan losses to nonperforming loans | 276.19 | % | 216.97 | % | 242.21 | % | 269.69 | % | 196.66 | % | |||||
Allowance for credit losses to nonperforming loans | 300.06 | % | 234.82 | % | 254.32 | % | 284.50 | % | 208.11 | % | |||||
CAPITAL & LIQUIDITY | |||||||||||||||
Period-end tangible common equity to assets (e) | 7.44 | % | 7.61 | % | 8.03 | % | 8.16 | % | 8.18 | % | |||||
Average equity to assets | 11.08 | % | 11.28 | % | 11.45 | % | 11.12 | % | 10.97 | % | |||||
Average equity to total loans | 18.97 | % | 18.95 | % | 17.88 | % | 17.37 | % | 17.46 | % | |||||
Average total loans to deposits | 72.11 | % | 74.04 | % | 81.36 | % | 81.21 | % | 79.89 | % | |||||
AVERAGE BALANCES | |||||||||||||||
Assets | $ | 24,013,594 | $ | 22,810,702 | $ | 14,983,543 | $ | 14,702,215 | $ | 14,734,016 | |||||
Deposits | 19,456,231 | 18,334,244 | 11,789,784 | 11,595,085 | 11,591,931 | ||||||||||
Originated loans | 9,377,826 | 8,877,754 | 8,735,307 | 8,444,208 | 8,185,507 | ||||||||||
Acquired loans, including covered loans, less loss share receivable | 4,652,101 | 4,696,740 | 856,875 | 971,589 | 1,075,144 | ||||||||||
Earning assets | 20,276,825 | 19,609,974 | 13,408,789 | 13,246,693 | 13,119,473 | ||||||||||
Shareholders' equity | 2,661,546 | 2,571,964 | 1,715,005 | 1,635,275 | 1,616,569 | ||||||||||
ENDING BALANCES | |||||||||||||||
Assets | $ | 24,134,986 | $ | 23,532,129 | $ | 15,272,484 | $ | 14,913,012 | $ | 14,628,843 | |||||
Deposits | 19,489,533 | 19,119,722 | 11,925,767 | 11,759,425 | 11,532,426 | ||||||||||
Originated loans | 9,789,139 | 9,132,625 | 8,779,970 | 8,731,659 | 8,316,420 | ||||||||||
Acquired loans, including covered loans, less loss share receivable | 4,410,041 | 4,935,218 | 801,239 | 905,391 | 1,043,058 | ||||||||||
Goodwill | 734,883 | 734,883 | 460,044 | 460,044 | 460,044 | ||||||||||
Intangible assets | 85,447 | 88,419 | 6,055 | 6,373 | 6,817 | ||||||||||
Earning assets | 21,305,580 | 20,781,079 | 13,905,342 | 13,472,067 | 13,219,301 | ||||||||||
Total shareholders' equity | 2,654,645 | 2,650,909 | 1,754,850 | 1,645,202 | 1,624,704 | ||||||||||
NOTES: | |||||||||||||||
(a) - Effective April 12, 2013, the Corporation acquired Citizens. Citizens' assets and liabilities were included in the consolidated balance sheet on the date of acquisition at fair value. Citizens' results of operations were included in the consolidated statements of comprehensive income beginning on the date of acquisition. |
(b) - Net interest income on a fully tax-equivalent ("FTE") basis is a non-GAAP measure and restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. |
(c) - 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. |
(d) - 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 ended September 30, 2013 and June 30, 2013 and $0.9 million in the quarter ended March 31, 2013. |
(e) - Tangible common equity and related ratios are non-GAAP measures and exclude goodwill and other intangibles as well as preferred stock. Management uses these measures to assess the quality of capital and believes that investors may find them useful in their analysis of the Corporation. |
(f) - The efficiency ratio excludes securities gains (losses). |
FIRSTMERIT CORPORATION AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||
(Dollars in thousands) | September 30, | December 31, | September 30, | |||||||||||
(Unaudited, except December 31, 2012, which is derived from the audited financial statements) | 2013 | 2012 | 2012 | |||||||||||
ASSETS | ||||||||||||||
Cash and due from banks | $ | 505,228 | $ | 244,223 | $ | 201,359 | ||||||||
Interest-bearing deposits in banks | 742,039 | 13,791 | 37,058 | |||||||||||
Total cash and cash equivalents | 1,247,267 | 258,014 | 238,417 | |||||||||||
Investment securities: | ||||||||||||||
Held-to-maturity | 2,749,934 | 622,121 | 620,631 | |||||||||||
Available-for-sale | 3,256,259 | 2,920,971 | 2,911,993 | |||||||||||
Other investments | 270,369 | 140,717 | 140,730 | |||||||||||
Loans held for sale | 17,813 | 23,683 | 17,540 | |||||||||||
Loans | 14,269,166 | 9,750,784 | 9,491,349 | |||||||||||
Allowance for loan losses | (143,835) | (142,197) | (142,586) | |||||||||||
Net loans | 14,125,331 | 9,608,587 | 9,348,763 | |||||||||||
Premises and equipment, net | 324,337 | 181,149 | 182,043 | |||||||||||
Goodwill | 734,883 | 460,044 | 460,044 | |||||||||||
Intangible assets | 85,447 | 6,373 | 6,817 | |||||||||||
Covered other real estate | 70,791 | 59,855 | 56,795 | |||||||||||
Accrued interest receivable and other assets | 1,252,555 | 631,498 | 645,070 | |||||||||||
Total assets | $ | 24,134,986 | $ | 14,913,012 | $ | 14,628,843 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
Deposits: | ||||||||||||||
Noninterest-bearing | $ | 5,461,674 | $ | 3,338,371 | $ | 3,231,500 | ||||||||
Interest-bearing | 2,815,681 | 1,287,674 | 1,079,913 | |||||||||||
Savings and money market accounts | 8,575,292 | 5,758,123 | 5,744,103 | |||||||||||
Certificates and other time deposits | 2,636,886 | 1,375,257 | 1,476,910 | |||||||||||
Total deposits | 19,489,533 | 11,759,425 | 11,532,426 | |||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 1,049,801 | 1,104,525 | 963,455 | |||||||||||
Wholesale borrowings | 200,858 | 136,883 | 178,083 | |||||||||||
Long-term debt | 324,425 | — | — | |||||||||||
Accrued taxes, expenses, and other liabilities | 415,724 | 266,977 | 330,175 | |||||||||||
Total liabilities | 21,480,341 | 13,267,810 | 13,004,139 | |||||||||||
Shareholders' equity: | ||||||||||||||
5.875% Non-Cumulative Perpetual Preferred Stock, Series A, without par value: authorized 115,000 shares; 100,000 issued | 100,000 | — | — | |||||||||||
Common stock warrant | 3,000 | — | — | |||||||||||
Common stock, without par value; authorized 300,000,000 shares; issued: September 30, 2013 - 170,179,305 shares; December 31, 2012 and September 30, 2012 - 115,121,731 shares | 127,937 | 127,937 | 127,937 | |||||||||||
Capital surplus | 1,388,638 | 475,979 | 473,781 | |||||||||||
Accumulated other comprehensive loss | (83,613) | (16,205) | (13,900) | |||||||||||
Retained earnings | 1,248,554 | 1,195,850 | 1,175,001 | |||||||||||
Treasury stock, at cost: September 30, 2013 - 5,134,681 shares; December 31, 2012 - 5,472,915 shares; September 30, 2012 - 5,468,853 shares | (129,871) | (138,359) | (138,115) | |||||||||||
Total shareholders' equity | 2,654,645 | 1,645,202 | 1,624,704 | |||||||||||
Total liabilities and shareholders' equity | $ | 24,134,986 | $ | 14,913,012 | $ | 14,628,843 | ||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES Period End Loans by Product Type (Unaudited) (Dollars in thousands) | |||||||||||||||
As of September 30, 2013 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 6,420,369 | $ | 1,971,062 | $ | 422,225 | $ | 8,813,656 | |||||||
Mortgage | 487,283 | 467,608 | 52,796 | 1,007,687 | |||||||||||
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 | 3,825,751 | 584,290 | 14,199,180 | |||||||||||
Loss share receivable | — | — | 69,986 | 69,986 | |||||||||||
Total loans | 9,789,139 | 3,825,751 | 654,276 | 14,269,166 | |||||||||||
Less allowance for loan losses | 98,291 | — | 45,544 | 143,835 | |||||||||||
Net loans | $ | 9,690,848 | $ | 3,825,751 | $ | 608,732 | $ | 14,125,331 | |||||||
As of June 30, 2013 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 5,997,812 | $ | 2,275,127 | $ | 505,706 | $ | 8,778,645 | |||||||
Mortgage | 462,427 | 440,394 | 56,056 | 958,877 | |||||||||||
Installment | 1,496,663 | 1,221,060 | 7,794 | 2,725,517 | |||||||||||
Home equity | 845,051 | 322,111 | 106,970 | 1,274,132 | |||||||||||
Credit card | 142,319 | — | — | 142,319 | |||||||||||
Leases | 188,353 | — | — | 188,353 | |||||||||||
Subtotal | 9,132,625 | 4,258,692 | 676,526 | 14,067,843 | |||||||||||
Loss share receivable | — | — | 83,910 | 83,910 | |||||||||||
Total loans | 9,132,625 | 4,258,692 | 760,436 | 14,151,753 | |||||||||||
Less allowance for loan losses | 98,645 | — | 49,069 | 147,714 | |||||||||||
Net loans | $ | 9,033,980 | $ | 4,258,692 | $ | 711,367 | $ | 14,004,039 | |||||||
As of March 31, 2013 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 5,888,337 | $ | — | $ | 621,188 | $ | 6,509,525 | |||||||
Mortgage | 451,522 | — | 58,627 | 510,149 | |||||||||||
Installment | 1,322,795 | — | 8,081 | 1,330,876 | |||||||||||
Home equity | 812,458 | — | 113,343 | 925,801 | |||||||||||
Credit card | 140,721 | — | — | 140,721 | |||||||||||
Leases | 164,137 | — | — | 164,137 | |||||||||||
Subtotal | 8,779,970 | — | 801,239 | 9,581,209 | |||||||||||
Loss share receivable | — | — | 95,593 | 95,593 | |||||||||||
Total loans | 8,779,970 | — | 896,832 | 9,676,802 | |||||||||||
Less allowance for loan losses | 98,843 | — | 47,945 | 146,788 | |||||||||||
Net loans | $ | 8,681,127 | $ | — | $ | 848,887 | $ | 9,530,014 | |||||||
As of December 31, 2012 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | 5,866,489 | $ | — | $ | 718,437 | $ | 6,584,926 | ||||||||
Mortgage | 445,211 | — | 61,540 | 506,751 | |||||||||||
Installment | 1,328,258 | — | 8,189 | 1,336,447 | |||||||||||
Home equity | 806,078 | — | 117,225 | 923,303 | |||||||||||
Credit card | 146,387 | — | — | 146,387 | |||||||||||
Leases | 139,236 | — | — | 139,236 | |||||||||||
Subtotal | 8,731,659 | — | 905,391 | 9,637,050 | |||||||||||
Loss share receivable | — | — | 113,734 | 113,734 | |||||||||||
Total loans | 8,731,659 | — | 1,019,125 | 9,750,784 | |||||||||||
Less allowance for loan losses | 98,942 | — | 43,255 | 142,197 | |||||||||||
Net loans | $ | 8,632,717 | $ | — | $ | 975,870 | $ | 9,608,587 | |||||||
As of September 30, 2012 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 5,511,678 | $ | — | $ | 847,741 | $ | 6,359,419 | |||||||
Mortgage | 439,062 | — | 63,779 | 502,841 | |||||||||||
Installment | 1,321,081 | — | 8,360 | 1,329,441 | |||||||||||
Home equity | 789,743 | — | 123,178 | 912,921 | |||||||||||
Credit card | 143,918 | — | — | 143,918 | |||||||||||
Leases | 110,938 | — | — | 110,938 | |||||||||||
Subtotal | 8,316,420 | — | 1,043,058 | 9,359,478 | |||||||||||
Loss share receivable | — | — | 131,871 | 131,871 | |||||||||||
Total loans | 8,316,420 | — | 1,174,929 | 9,491,349 | |||||||||||
Less allowance for loan losses | 98,942 | — | 43,644 | 142,586 | |||||||||||
Net loans | $ | 8,217,478 | $ | — | $ | 1,131,285 | $ | 9,348,763 | |||||||
(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. | |||||||||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
AVERAGE CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||
Quarterly Periods | |||||||||||||||||||
(Unaudited) | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||
(Dollars in thousands) | 2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from banks | $ | 1,415,430 | $ | 806,129 | $ | 394,896 | $ | 238,366 | $ | 440,231 | |||||||||
Investment securities: | |||||||||||||||||||
Held-to-maturity | 2,640,807 | 1,953,094 | 637,614 | 620,154 | 337,685 | ||||||||||||||
Available-for-sale | 3,243,173 | 3,723,002 | 2,919,636 | 2,925,938 | 3,215,203 | ||||||||||||||
Other investments | 267,743 | 253,649 | 140,729 | 140,723 | 140,736 | ||||||||||||||
Loans held for sale | 18,265 | 17,394 | 14,884 | 20,485 | 23,631 | ||||||||||||||
Loans | 14,106,837 | 13,662,835 | 9,695,926 | 9,539,393 | 9,402,218 | ||||||||||||||
Less: allowance for loan losses | 146,509 | 146,705 | 141,735 | 141,270 | 145,061 | ||||||||||||||
Net loans | 13,960,328 | 13,516,130 | 9,554,191 | 9,398,123 | 9,257,157 | ||||||||||||||
Total earning assets | 20,276,825 | 19,609,974 | 13,408,789 | 13,246,693 | 13,119,473 | ||||||||||||||
Premises and equipment, net | 322,236 | 299,979 | 179,381 | 181,738 | 184,544 | ||||||||||||||
Accrued interest receivable and other assets | 2,145,612 | 2,241,325 | 1,142,212 | 1,176,688 | 1,134,829 | ||||||||||||||
TOTAL ASSETS | $ | 24,013,594 | $ | 22,810,702 | $ | 14,983,543 | $ | 14,702,215 | $ | 14,734,016 | |||||||||
LIABILITIES | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Noninterest-bearing | $ | 5,443,800 | $ | 5,095,977 | $ | 3,321,660 | $ | 3,306,444 | $ | 3,236,703 | |||||||||
Interest-bearing | 2,720,592 | 2,347,155 | 1,300,816 | 1,122,796 | 1,080,841 | ||||||||||||||
Savings and money market accounts | 8,570,910 | 8,210,780 | 5,835,750 | 5,743,599 | 5,746,210 | ||||||||||||||
Certificates and other time deposits | 2,720,929 | 2,680,332 | 1,331,558 | 1,422,246 | 1,528,177 | ||||||||||||||
Total deposits | 19,456,231 | 18,334,244 | 11,789,784 | 11,595,085 | 11,591,931 | ||||||||||||||
Federal funds purchased and securities sold under | |||||||||||||||||||
agreements to repurchase | 1,011,991 | 927,451 | 906,717 | 957,564 | 1,032,401 | ||||||||||||||
Wholesale borrowings | 201,012 | 237,887 | 136,298 | 163,405 | 178,022 | ||||||||||||||
Long-term borrowings | 324,424 | 314,597 | 155,506 | — | — | ||||||||||||||
Total funds | 20,993,658 | 19,814,179 | 12,988,305 | 12,716,054 | 12,802,354 | ||||||||||||||
Accrued taxes, expenses and other liabilities | 358,390 | 424,559 | 280,233 | 350,886 | 315,093 | ||||||||||||||
Total liabilities | 21,352,048 | 20,238,738 | 13,268,538 | 13,066,940 | 13,117,447 | ||||||||||||||
SHAREHOLDERS' EQUITY | |||||||||||||||||||
Preferred stock | 100,000 | 100,000 | 62,222 | — | — | ||||||||||||||
Common stock warrant | 3,000 | 2,637 | — | — | — | ||||||||||||||
Common stock | 127,937 | 127,937 | 127,937 | 127,937 | 127,937 | ||||||||||||||
Capital surplus | 1,386,931 | 1,274,758 | 473,943 | 474,532 | 472,820 | ||||||||||||||
Accumulated other comprehensive income (loss) | (82,598) | (29,033) | (21,247) | (17,666) | (14,627) | ||||||||||||||
Retained earnings | 1,256,052 | 1,225,380 | 1,209,837 | 1,188,641 | 1,168,649 | ||||||||||||||
Treasury stock | (129,776) | (129,715) | (137,687) | (138,169) | (138,210) | ||||||||||||||
Total shareholders' equity | 2,661,546 | 2,571,964 | 1,715,005 | 1,635,275 | 1,616,569 | ||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 24,013,594 | $ | 22,810,702 | $ | 14,983,543 | $ | 14,702,215 | $ | 14,734,016 | |||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES Average Loans by Product Type (Unaudited) (Dollars in thousands) | |||||||||||||||
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 | |||||||
Quarter ended June 30, 2013 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 5,888,935 | $ | 2,141,015 | $ | 575,859 | $ | 8,605,809 | |||||||
Mortgage | 453,813 | 408,723 | 56,825 | 919,361 | |||||||||||
Installment | 1,388,765 | 1,107,076 | 7,912 | 2,503,753 | |||||||||||
Home equity | 831,243 | 288,254 | 111,076 | 1,230,573 | |||||||||||
Credit card | 141,785 | — | — | 141,785 | |||||||||||
Leases | 173,213 | — | — | 173,213 | |||||||||||
Subtotal | 8,877,754 | 3,945,068 | 751,672 | 13,574,494 | |||||||||||
Loss share receivable | — | — | 88,341 | 88,341 | |||||||||||
Total loans | 8,877,754 | 3,945,068 | 840,013 | 13,662,835 | |||||||||||
Less allowance for loan losses | 99,411 | — | 47,294 | 146,705 | |||||||||||
Net loans | $ | 8,778,343 | $ | 3,945,068 | $ | 792,719 | $ | 13,516,130 | |||||||
Quarter Ended March 31, 2013 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 5,859,818 | $ | — | $ | 673,815 | $ | 6,533,633 | |||||||
Mortgage | 448,589 | — | 60,391 | 508,980 | |||||||||||
Installment | 1,325,016 | — | 8,118 | 1,333,134 | |||||||||||
Home equity | 806,936 | — | 114,551 | 921,487 | |||||||||||
Credit card | 144,159 | — | — | 144,159 | |||||||||||
Leases | 150,789 | — | — | 150,789 | |||||||||||
Subtotal | 8,735,307 | — | 856,875 | 9,592,182 | |||||||||||
Loss share receivable | — | — | 103,744 | 103,744 | |||||||||||
Total loans | 8,735,307 | — | 960,619 | 9,695,926 | |||||||||||
Less allowance for loan losses | 98,660 | — | 43,075 | 141,735 | |||||||||||
Net loans | $ | 8,636,647 | $ | — | $ | 917,544 | $ | 9,554,191 | |||||||
Quarter Ended December 31, 2012 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 5,600,522 | $ | — | $ | 780,904 | $ | 6,381,426 | |||||||
Mortgage | 443,542 | — | 62,382 | 505,924 | |||||||||||
Installment | 1,331,131 | — | 8,251 | 1,339,382 | |||||||||||
Home equity | 798,663 | — | 120,052 | 918,715 | |||||||||||
Credit card | 145,050 | — | — | 145,050 | |||||||||||
Leases | 125,300 | — | — | 125,300 | |||||||||||
Subtotal | 8,444,208 | — | 971,589 | 9,415,797 | |||||||||||
Loss share receivable | — | — | 123,596 | 123,596 | |||||||||||
Total loans | 8,444,208 | — | 1,095,185 | 9,539,393 | |||||||||||
Less allowance for loan losses | 99,461 | — | 41,809 | 141,270 | |||||||||||
Net loans | $ | 8,344,747 | $ | — | $ | 1,053,376 | $ | 9,398,123 | |||||||
Quarter ended September 30, 2012 | |||||||||||||||
Originated Loans | Acquired Loans (1) | Covered Loans (2) | Total Loans | ||||||||||||
Commercial | $ | 5,443,712 | $ | — | $ | 877,003 | $ | 6,320,715 | |||||||
Mortgage | 437,123 | — | 64,382 | 501,505 | |||||||||||
Installment | 1,293,054 | — | 8,388 | 1,301,442 | |||||||||||
Home equity | 779,087 | — | 125,371 | 904,458 | |||||||||||
Credit card | 143,948 | — | — | 143,948 | |||||||||||
Leases | 88,583 | — | — | 88,583 | |||||||||||
Subtotal | 8,185,507 | — | 1,075,144 | 9,260,651 | |||||||||||
Loss share receivable | — | — | 141,567 | 141,567 | |||||||||||
Total loans | 8,185,507 | — | 1,216,711 | 9,402,218 | |||||||||||
Less allowance for loan losses | 103,511 | — | 41,550 | 145,061 | |||||||||||
Net loans | $ | 8,081,996 | $ | — | $ | 1,175,161 | $ | 9,257,157 | |||||||
(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. | |||||||||||||||
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, 2013 | June 30, 2013 | September 30, 2012 | ||||||||||||||||||||||||||||||
(Unaudited) | Average | Average | Average | Average | Average | Average | ||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Cash and due from banks | $ | 1,415,430 | $ | 806,129 | $ | 440,231 | ||||||||||||||||||||||||||
Investment securities and federal funds sold: | ||||||||||||||||||||||||||||||||
U.S. treasury securities and U.S. government agency obligations (taxable) | 4,849,135 | $ | 23,551 | 1.93 | % | 4,714,823 | $ | 24,679 | 2.10 | % | 2,688,658 | $ | 17,981 | 2.66 | % | |||||||||||||||||
Obligations of states and political subdivisions (tax exempt) | 712,296 | 8,890 | 4.95 | % | 710,579 | 9,217 | 5.20 | % | 660,143 | 6,332 | 3.82 | % | ||||||||||||||||||||
Other securities and federal funds sold | 590,292 | 6,215 | 4.18 | % | 504,343 | 4,459 | 3.55 | % | 344,823 | 2,652 | 3.06 | % | ||||||||||||||||||||
Total investment securities and federal funds sold | 6,151,723 | 38,656 | 2.49 | % | 5,929,745 | 38,355 | 2.59 | % | 3,693,624 | 26,965 | 2.90 | % | ||||||||||||||||||||
Loans held for sale | 18,265 | 174 | 3.78 | % | 17,394 | 143 | 3.30 | % | 23,631 | 240 | 4.04 | % | ||||||||||||||||||||
Loans, including loss share receivable | 14,106,837 | 182,406 | 5.13 | % | 13,662,835 | 178,847 | 5.25 | % | 9,402,218 | 103,128 | 4.36 | % | ||||||||||||||||||||
Total earning assets | 20,276,825 | 221,236 | 4.33 | % | 19,609,974 | 217,345 | 4.45 | % | 13,119,473 | 130,333 | 3.95 | % | ||||||||||||||||||||
Allowance for loan losses | (146,509) | (146,705) | (145,061) | |||||||||||||||||||||||||||||
Other assets | 2,467,848 | 2,541,304 | 1,319,373 | |||||||||||||||||||||||||||||
Total assets | $ | 24,013,594 | $ | 22,810,702 | $ | 14,734,016 | ||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||
Noninterest-bearing | $ | 5,443,800 | — | — | % | $ | 5,095,977 | — | — | % | $ | 3,236,703 | — | — | % | |||||||||||||||||
Interest-bearing | 2,720,592 | 809 | 0.12 | % | 2,347,155 | 656 | 0.11 | % | 1,080,841 | 243 | 0.09 | % | ||||||||||||||||||||
Savings and money market accounts | 8,570,910 | 6,495 | 0.30 | % | 8,210,780 | 6,469 | 0.32 | % | 5,746,210 | 5,166 | 0.36 | % | ||||||||||||||||||||
Certificates and other time deposits | 2,720,929 | 1,712 | 0.25 | % | 2,680,332 | 3,374 | 0.50 | % | 1,528,177 | 2,743 | 0.71 | % | ||||||||||||||||||||
Total deposits | 19,456,231 | 9,016 | 0.18 | % | 18,334,244 | 10,499 | 0.23 | % | 11,591,931 | 8,152 | 0.28 | % | ||||||||||||||||||||
Securities sold under agreements to repurchase | 1,011,991 | 306 | 0.12 | % | 927,451 | 329 | 0.14 | % | 1,032,401 | 310 | 0.12 | % | ||||||||||||||||||||
Wholesale borrowings | 201,012 | 936 | 1.85 | % | 237,887 | 1,169 | 1.97 | % | 178,022 | 1,130 | 2.53 | % | ||||||||||||||||||||
Long-term debt | 324,424 | 3,899 | 4.77 | % | 314,597 | 3,743 | 4.77 | % | — | — | — | % | ||||||||||||||||||||
Total interest bearing liabilities | 15,549,858 | 14,157 | 0.36 | % | 14,718,202 | 15,740 | 0.43 | % | 9,565,651 | 9,592 | 0.40 | % | ||||||||||||||||||||
Other liabilities | 358,390 | 424,559 | 315,093 | |||||||||||||||||||||||||||||
Shareholders' equity | 2,661,546 | 2,571,964 | 1,616,569 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 24,013,594 | $ | 22,810,702 | $ | 14,734,016 | ||||||||||||||||||||||||||
Net yield on earning assets | $ | 20,276,825 | $ | 207,079 | 4.05 | % | $ | 19,609,974 | $ | 201,605 | 4.12 | % | $ | 13,119,473 | $ | 120,741 | 3.66 | % | ||||||||||||||
Interest rate spread | 3.97 | % | 4.02 | % | 3.55 | % | ||||||||||||||||||||||||||
Note: Interest income on tax-exempt securities and loans has been adjusted to a fully-taxable equivalent basis. | ||||||||||||||||||||||||||||||||
Nonaccrual loans have been included in the average balances. | ||||||||||||||||||||||||||||||||
FIRSTMERIT CORPORATION AND SUBIDARIES | |||||||||||||||||||||
AVERAGE CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||
Fully Tax-equivalent Interest Rates and Interest Differential | |||||||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||||
September 30, 2013 | September 30, 2012 | ||||||||||||||||||||
(Unaudited) | Average | Average | Average | Average | |||||||||||||||||
(Dollars in thousands) | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||
ASSETS | |||||||||||||||||||||
Cash and due from banks | $ | 875,890 | $ | 409,944 | |||||||||||||||||
Investment securities and federal funds sold: | |||||||||||||||||||||
U.S. treasury securities and U.S. government agency obligations (taxable) | 4,125,541 | $ | 64,525 | 2.09 | % | 2,797,521 | $ | 56,688 | 2.71 | % | |||||||||||
Obligations of states and political subdivisions (tax exempt) | 655,257 | 24,702 | 5.04 | % | 526,962 | 18,450 | 4.68 | % | |||||||||||||
Other securities and federal funds sold | 488,005 | 13,618 | 3.73 | % | 369,639 | 8,146 | 2.94 | % | |||||||||||||
Total investment securities and federal funds sold | 5,268,803 | 102,845 | 2.61 | % | 3,694,122 | 83,284 | 3.01 | % | |||||||||||||
Loans held for sale | 16,860 | 461 | 3.66 | % | 24,279 | 761 | 4.19 | % | |||||||||||||
Loans, including loss share receivable | 12,504,632 | 460,257 | 4.92 | % | 9,295,866 | 309,530 | 4.45 | % | |||||||||||||
Total earning assets | 17,790,295 | 563,563 | 4.24 | % | 13,014,267 | 393,575 | 4.04 | % | |||||||||||||
Allowance for loan losses | (144,954) | (143,756) | |||||||||||||||||||
Other assets | 2,111,427 | 1,316,071 | |||||||||||||||||||
Total assets | $ | 20,632,658 | $ | 14,596,526 | |||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Noninterest-bearing | $ | 4,628,252 | — | — | % | $ | 3,139,515 | — | — | % | |||||||||||
Interest-bearing | 2,128,055 | 1,784 | 0.11 | % | 1,069,290 | 726 | 0.09 | % | |||||||||||||
Savings and money market accounts | 7,549,165 | 18,279 | 0.32 | % | 5,717,860 | 15,302 | 0.36 | % | |||||||||||||
Certificates and other time deposits | 2,249,362 | 7,149 | 0.42 | % | 1,613,270 | 9,436 | 0.78 | % | |||||||||||||
Total deposits | 16,554,834 | 27,212 | 0.22 | % | 11,539,935 | 25,464 | 0.29 | % | |||||||||||||
Securities sold under agreements to repurchase | 949,105 | 949 | 0.13 | % | 947,135 | 854 | 0.12 | % | |||||||||||||
Wholesale borrowings | 191,970 | 2,955 | 2.06 | % | 180,215 | 3,399 | 2.52 | % | |||||||||||||
Long-term debt | 265,461 | 9,390 | 4.73 | % | — | — | — | % | |||||||||||||
Total interest bearing liabilities | 13,333,118 | 40,506 | 0.41 | % | 9,527,770 | 29,717 | 0.42 | % | |||||||||||||
Other liabilities | 351,650 | 330,254 | |||||||||||||||||||
Shareholders' equity | 2,319,638 | 1,598,987 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 20,632,658 | $ | 14,596,526 | |||||||||||||||||
Net yield on earning assets | $ | 17,790,295 | $ | 523,057 | 3.93 | % | $ | 13,014,267 | $ | 363,858 | 3.73 | % | |||||||||
Interest rate spread | 3.83 | % | 3.62 | % | |||||||||||||||||
Note: Interest income on tax-exempt securities and loans has been adjusted to a fully-taxable equivalent basis. | |||||||||||||||||||||
Nonaccrual loans have been included in the average balances. | |||||||||||||||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES | ||||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||||
(Unaudited) | Quarters Ended | Nine Months Ended | ||||||||||||||||
(Dollars in thousands except per share data) | September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||
Interest income: | ||||||||||||||||||
Loans and loans held for sale | $ | 182,107 | $ | 103,005 | $ | 459,313 | $ | 309,213 | ||||||||||
Investment securities: | ||||||||||||||||||
Taxable | 29,766 | 20,633 | 78,143 | 64,834 | ||||||||||||||
Tax-exempt | 5,624 | 3,844 | 15,767 | 11,270 | ||||||||||||||
Total investment securities interest | 35,390 | 24,477 | 93,910 | 76,104 | ||||||||||||||
Total interest income | 217,497 | 127,482 | 553,223 | 385,317 | ||||||||||||||
Interest expense: | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Interest-bearing | 809 | 243 | 1,784 | 726 | ||||||||||||||
Savings and money market accounts | 6,495 | 5,166 | 18,279 | 15,302 | ||||||||||||||
Certificates and other time deposits | 1,712 | 2,743 | 7,149 | 9,436 | ||||||||||||||
Securities sold under agreements to repurchase | 306 | 310 | 949 | 854 | ||||||||||||||
Wholesale borrowings | 936 | 1,130 | 2,955 | 3,399 | ||||||||||||||
Long-term debt | 3,899 | — | 9,390 | — | ||||||||||||||
Total interest expense | 14,157 | 9,592 | 40,506 | 29,717 | ||||||||||||||
Net interest income | 203,340 | 117,890 | 512,717 | 355,600 | ||||||||||||||
Provision for originated loan losses | 2,523 | 9,965 | 11,482 | 26,860 | ||||||||||||||
Provision for acquired loan losses | 2,033 | — | 2,033 | — | ||||||||||||||
Provision for covered loan losses | 1,823 | 6,214 | 10,119 | 15,576 | ||||||||||||||
Total provision | 6,379 | 16,179 | 23,634 | 42,436 | ||||||||||||||
Net interest income after provision for loan losses | 196,961 | 101,711 | 489,083 | 313,164 | ||||||||||||||
Other income: | ||||||||||||||||||
Trust department income | 9,608 | 6,124 | 24,515 | 17,481 | ||||||||||||||
Service charges on deposits | 22,146 | 14,603 | 55,315 | 43,490 | ||||||||||||||
Credit card fees | 13,588 | 11,006 | 38,128 | 32,402 | ||||||||||||||
ATM and other service fees | 5,216 | 3,680 | 13,496 | 11,360 | ||||||||||||||
Bank owned life insurance income | 4,351 | 3,094 | 12,889 | 9,073 | ||||||||||||||
Investment services and insurance | 3,403 | 2,208 | 9,247 | 6,843 | ||||||||||||||
Investment securities (losses)/gains, net | — | 553 | (2,803) | 1,361 | ||||||||||||||
Loan sales and servicing income | 3,644 | 7,255 | 19,492 | 19,085 | ||||||||||||||
Other operating income | 9,134 | 6,402 | 27,644 | 20,857 | ||||||||||||||
Total other income | 71,090 | 54,925 | 197,923 | 161,952 | ||||||||||||||
Other expenses: | ||||||||||||||||||
Salaries, wages, pension and employee benefits | 97,390 | 58,061 | 260,395 | 183,632 | ||||||||||||||
Net occupancy expense | 13,816 | 8,077 | 35,444 | 24,640 | ||||||||||||||
Equipment expense | 11,040 | 7,143 | 28,698 | 21,845 | ||||||||||||||
Stationery, supplies and postage | 3,801 | 2,210 | 9,304 | 6,638 | ||||||||||||||
Bankcard, loan processing and other costs | 40,786 | 8,424 | 61,043 | 24,935 | ||||||||||||||
Professional services | 9,768 | 4,702 | 32,322 | 17,361 | ||||||||||||||
Amortization of intangibles | 2,972 | 456 | 5,700 | 1,422 | ||||||||||||||
FDIC insurance expense | 4,925 | 1,832 | 12,601 | 9,015 | ||||||||||||||
Other operating expense | 26,880 | 17,682 | 62,436 | 51,944 | ||||||||||||||
Total other expenses | 211,378 | 108,587 | 507,943 | 341,432 | ||||||||||||||
Income before income tax expense | 56,673 | 48,049 | 179,063 | 133,684 | ||||||||||||||
Income tax expense | 15,958 | 13,096 | 52,553 | 37,802 | ||||||||||||||
Net income | $ | 40,715 | $ | 34,953 | $ | 126,510 | $ | 95,882 | ||||||||||
Other comprehensive income, net of taxes | ||||||||||||||||||
Changes in unrealized securities' holding gains and (losses), net of taxes of ($6.3) million and $2.4 million for the quarter ended and ($36.3) million and $5.4 million for the nine months ended, respectively | $ | (11,716) | $ | 4,884 | $ | (69,229) | $ | 10,872 | ||||||||||
Reclassification for realized securities' (gains) and losses, net of taxes of ($0.0) million and $0.19 million for the quarter ended and ($0.98)million and $0.48 million for the nine months ended, respectively | — | (359) | 1,822 | (885) | ||||||||||||||
Total other comprehensive gain (loss), net of taxes | (11,716) | 4,525 | (67,407) | 9,987 | ||||||||||||||
Comprehensive income | $ | 28,999 | $ | 39,478 | $ | 59,103 | $ | 105,869 | ||||||||||
Net income attributable to common shareholders | $ | 38,937 | $ | 34,797 | $ | 121,544 | $ | 95,795 | ||||||||||
Net income used in diluted EPS calculation | $ | 38,939 | $ | 34,797 | $ | 121,549 | $ | 95,795 | ||||||||||
Weighted average number of common shares outstanding - basic | 165,044 | 109,645 | 144,402 | 109,473 | ||||||||||||||
Weighted average number of common shares outstanding - diluted | 168,917 | 109,645 | 147,342 | 109,473 | ||||||||||||||
Basic earnings per common share | $ | 0.24 | $ | 0.32 | $ | 0.84 | $ | 0.88 | ||||||||||
Diluted earnings per common share | $ | 0.23 | $ | 0.32 | $ | 0.82 | $ | 0.88 | ||||||||||
Dividend per common share | $ | 0.16 | $ | 0.16 | $ | 0.48 | $ | 0.48 | ||||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME---LINKED QUARTERS | |||||||||||||||||||
Quarterly Results | |||||||||||||||||||
(Unaudited) | 2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||||||
(Dollars in thousands, except share data) | 3rd qtr | 2nd qtr | 1st qtr | 4th qtr | 3rd qtr | ||||||||||||||
Loans and loans held for sale | $ | 182,107 | $ | 178,535 | $ | 98,672 | $ | 101,086 | $ | 103,005 | |||||||||
Investment securities | 35,390 | 35,236 | 23,284 | 24,280 | 24,477 | ||||||||||||||
Total interest income | 217,497 | 213,771 | 121,956 | 125,366 | 127,482 | ||||||||||||||
Interest on deposits: | |||||||||||||||||||
Interest-bearing | 809 | 656 | 318 | 261 | 243 | ||||||||||||||
Savings and money market accounts | 6,495 | 6,469 | 5,315 | 5,261 | 5,166 | ||||||||||||||
Certificates and other time deposits | 1,712 | 3,374 | 2,063 | 2,287 | 2,743 | ||||||||||||||
Securities sold under agreements to repurchase | 306 | 329 | 313 | 303 | 310 | ||||||||||||||
Wholesale borrowings | 936 | 1,169 | 850 | 1,024 | 1,130 | ||||||||||||||
Long-term debt | 3,899 | 3,743 | 1,748 | — | — | ||||||||||||||
Total interest expense | 14,157 | 15,740 | 10,607 | 9,136 | 9,592 | ||||||||||||||
Net interest income | 203,340 | 198,031 | 111,349 | 116,230 | 117,890 | ||||||||||||||
Provision for originated loan losses | 2,523 | 3,151 | 5,808 | 7,116 | 9,965 | ||||||||||||||
Provision for acquired loan losses | 2,033 | — | — | — | — | ||||||||||||||
Provision for covered loan losses | 1,823 | 4,158 | 4,138 | 5,146 | 6,214 | ||||||||||||||
Total provision for loan losses | 6,379 | 7,309 | 9,946 | 12,262 | 16,179 | ||||||||||||||
Net interest income after provision for loan losses | 196,961 | 190,722 | 101,403 | 103,968 | 101,711 | ||||||||||||||
Other income: | |||||||||||||||||||
Trust department income | 9,608 | 9,167 | 5,741 | 5,662 | 6,124 | ||||||||||||||
Service charges on deposits | 22,146 | 20,582 | 12,585 | 14,247 | 14,603 | ||||||||||||||
Credit card fees | 13,588 | 14,317 | 10,222 | 11,167 | 11,006 | ||||||||||||||
ATM and other service fees | 5,216 | 4,945 | 3,335 | 3,432 | 3,680 | ||||||||||||||
Bank owned life insurance income | 4,351 | 3,641 | 4,897 | 3,067 | 3,094 | ||||||||||||||
Investment services and insurance | 3,403 | 3,429 | 2,415 | 2,147 | 2,208 | ||||||||||||||
Investment securities (losses)/gains, net | — | (2,794) | (9) | 2,425 | 553 | ||||||||||||||
Loan sales and servicing income | 3,644 | 7,985 | 7,863 | 7,946 | 7,255 | ||||||||||||||
Other operating income | 9,134 | 8,167 | 10,343 | 11,559 | 6,402 | ||||||||||||||
Total other income | 71,090 | 69,439 | 57,392 | 61,652 | 54,925 | ||||||||||||||
Other expenses: | |||||||||||||||||||
Salaries, wages, pension and employee benefits | 97,390 | 105,099 | 57,906 | 61,560 | 58,061 | ||||||||||||||
Net occupancy expense | 13,816 | 13,346 | 8,282 | 7,114 | 8,077 | ||||||||||||||
Equipment expense | 11,040 | 10,309 | 7,349 | 7,398 | 7,143 | ||||||||||||||
Stationery, supplies and postage | 3,801 | 3,407 | 2,096 | 2,162 | 2,210 | ||||||||||||||
Bankcard, loan processing and other costs | 40,786 | 12,417 | 7,840 | 9,260 | 8,424 | ||||||||||||||
Professional services | 9,768 | 17,144 | 5,410 | 6,119 | 4,702 | ||||||||||||||
Amortization of intangibles | 2,972 | 2,411 | 317 | 444 | 456 | ||||||||||||||
FDIC insurance expense | 4,925 | 4,149 | 3,526 | 1,738 | 1,832 | ||||||||||||||
Other operating expense | 26,880 | 21,358 | 14,199 | 16,386 | 17,682 | ||||||||||||||
Total other expenses | 211,378 | 189,640 | 106,925 | 112,181 | 108,587 | ||||||||||||||
Income before income tax expense | 56,673 | 70,521 | 51,870 | 53,439 | 48,049 | ||||||||||||||
Income taxes | 15,958 | 22,071 | 14,524 | 15,215 | 13,096 | ||||||||||||||
Net income | 40,715 | 48,450 | 37,346 | 38,224 | 34,953 | ||||||||||||||
Other comprehensive income (loss), net of taxes | (11,716) | (47,777) | (7,914) | (2,305) | 4,525 | ||||||||||||||
Comprehensive income | $ | 28,999 | $ | 673 | $ | 29,432 | $ | 35,919 | $ | 39,478 | |||||||||
Net income attributable to common shareholders | $ | 38,937 | $ | 46,597 | $ | 36,125 | $ | 38,041 | $ | 34,797 | |||||||||
Net income used in diluted EPS calculation | $ | 38,939 | $ | 46,597 | $ | 36,125 | $ | 38,041 | $ | 34,797 | |||||||||
Weighted-average common shares - basic | 165,044 | 157,863 | 109,689 | 109,652 | 109,645 | ||||||||||||||
Weighted-average common shares - diluted | 168,917 | 157,982 | 109,689 | 109,652 | 109,645 | ||||||||||||||
Basic earnings per common share | $ | 0.24 | $ | 0.30 | $ | 0.33 | $ | 0.35 | $ | 0.32 | |||||||||
Diluted earnings per common share | $ | 0.23 | $ | 0.29 | $ | 0.33 | $ | 0.35 | $ | 0.32 | |||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||
ASSET QUALITY INFORMATION (excluding acquired loans and covered assets) (a) | |||||||||||||||||||||||
(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 | 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | |||||||||||||||||
Allowance for originated loan losses, beginning of period | $ | 98,645 | $ | 98,843 | $ | 98,942 | $ | 98,942 | $ | 103,849 | $ | 107,699 | |||||||||||
Provision for originated loan losses | 2,523 | 3,151 | 5,808 | 7,116 | 9,965 | 33,976 | |||||||||||||||||
Charge-offs | 8,515 | 10,969 | 10,776 | 12,475 | 20,999 | 65,905 | |||||||||||||||||
Recoveries | 5,638 | 7,620 | 4,869 | 5,359 | 6,127 | 23,172 | |||||||||||||||||
Net charge-offs | 2,877 | 3,349 | 5,907 | 7,116 | 14,872 | 42,733 | |||||||||||||||||
Allowance for originated loan losses, end of period | $ | 98,291 | $ | 98,645 | $ | 98,843 | $ | 98,942 | $ | 98,942 | $ | 98,942 | |||||||||||
Reserve for unfunded lending commitments, | |||||||||||||||||||||||
beginning of period | $ | 8,114 | $ | 4,941 | $ | 5,433 | $ | 5,760 | $ | 5,666 | $ | 6,373 | |||||||||||
Provision for (relief of) credit losses | 379 | 3,173 | (492) | (327) | 94 | (940) | |||||||||||||||||
Reserve for unfunded lending commitments, | |||||||||||||||||||||||
end of period | $ | 8,493 | $ | 8,114 | $ | 4,941 | $ | 5,433 | $ | 5,760 | $ | 5,433 | |||||||||||
Allowance for Credit Losses | $ | 106,784 | $ | 106,759 | $ | 103,784 | $ | 104,375 | $ | 104,702 | $ | 104,375 | |||||||||||
Ratios | |||||||||||||||||||||||
Provision for loan losses to average loans | 0.11 | % | 0.14 | % | 0.27 | % | 0.34 | % | 0.48 | % | 0.42 | % | |||||||||||
Provision for credit losses as a % of average loans | 0.00 | % | 0.00 | % | 0.03 | % | (0.08)% | (0.10)% | 0.05 | % | |||||||||||||
Net charge-offs to average loans | 0.12 | % | 0.15 | % | 0.27 | % | 0.34 | % | 0.72 | % | 0.53 | % | |||||||||||
Allowance for loan losses to period-end loans | 1.00 | % | 1.08 | % | 1.13 | % | 1.13 | % | 1.19 | % | 1.13 | % | |||||||||||
Allowance for credit losses to period-end loans | 1.09 | % | 1.17 | % | 1.18 | % | 1.20 | % | 1.26 | % | 1.20 | % | |||||||||||
Allowance for loan losses to nonperforming loans | 276.19 | % | 216.97 | % | 242.21 | % | 269.69 | % | 196.66 | % | 269.69 | % | |||||||||||
Allowance for credit losses to nonperforming loans | 300.06 | % | 234.82 | % | 254.32 | % | 284.50 | % | 208.11 | % | 284.50 | % | |||||||||||
Asset Quality | |||||||||||||||||||||||
Impaired originated loans: | |||||||||||||||||||||||
Nonaccrual | $ | 19,140 | $ | 28,935 | $ | 23,843 | $ | 21,766 | $ | 31,492 | $ | 21,766 | |||||||||||
Other nonperforming loans: | |||||||||||||||||||||||
Nonaccrual | 16,448 | 16,529 | 16,966 | 14,921 | 18,819 | 14,921 | |||||||||||||||||
Total nonperforming loans | 35,588 | 45,464 | 40,809 | 36,687 | 50,311 | 36,687 | |||||||||||||||||
Other real estate ("ORE") | 19,838 | 20,713 | 11,422 | 13,537 | 13,744.00 | 13,537 | |||||||||||||||||
Total nonperforming assets ("NPAs") | $ | 55,426 | $ | 66,177 | $ | 52,231 | $ | 50,224 | $ | 64,055 | $ | 50,224 | |||||||||||
NPAs to period-end loans + ORE | 0.57 | % | 0.72 | % | 0.59 | % | 0.57 | % | 0.77 | % | 0.57 | % | |||||||||||
Accruing originated loans past due 90 days or more | $ | 6,253 | $ | 11,760 | $ | 12,393 | $ | 9,417 | $ | 9,691 | $ | 9,417 | |||||||||||
(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. | |||||||||||||||||||||||
FIRSTMERIT CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
NONINTEREST INCOME AND NONINTEREST EXPENSE DETAIL | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||||||||
QUARTERLY OTHER INCOME DETAIL | 3rd qtr | 2nd qtr | 1st qtr | 4th qtr | 3rd qtr | |||||||||||||||
Trust department income | $ | 9,608 | $ | 9,167 | $ | 5,741 | $ | 5,662 | $ | 6,124 | ||||||||||
Service charges on deposits | 22,146 | 20,582 | 12,585 | 14,247 | 14,603 | |||||||||||||||
Credit card fees | 13,588 | 14,317 | 10,222 | 11,167 | 11,006 | |||||||||||||||
ATM and other service fees | 5,216 | 4,945 | 3,335 | 3,432 | 3,680 | |||||||||||||||
Bank owned life insurance income | 4,351 | 3,641 | 4,897 | 3,067 | 3,094 | |||||||||||||||
Investment services and insurance | 3,403 | 3,429 | 2,415 | 2,147 | 2,208 | |||||||||||||||
Investment securities (losses)/gains, net | — | (2,794) | (9) | 2,425 | 553 | |||||||||||||||
Loan sales and servicing income | 3,644 | 7,985 | 7,863 | 7,946 | 7,255 | |||||||||||||||
Other operating income | 9,134 | 8,167 | 10,343 | 11,559 | 6,402 | |||||||||||||||
Total Other Income | $ | 71,090 | $ | 69,439 | $ | 57,392 | $ | 61,652 | $ | 54,925 | ||||||||||
2013 | 2013 | 2013 | 2012 | 2012 | ||||||||||||||||
QUARTERLY OTHER EXPENSES DETAIL | 3rd qtr | 2nd qtr | 1st qtr | 4th qtr | 3rd qtr | |||||||||||||||
Salaries and wages | $ | 79,369 | $ | 85,680 | $ | 46,391 | $ | 45,988 | $ | 43,806 | ||||||||||
Pension and employee benefits | 18,021 | 19,419 | 11,515 | 15,572 | 14,255 | |||||||||||||||
Net occupancy expense | 13,816 | 13,346 | 8,282 | 7,114 | 8,077 | |||||||||||||||
Equipment expense | 11,040 | 10,309 | 7,349 | 7,398 | 7,143 | |||||||||||||||
Taxes, other than income taxes | 2,785 | 2,891 | 1,922 | 1,924 | 2,051 | |||||||||||||||
Stationery, supplies and postage | 3,801 | 3,407 | 2,096 | 2,162 | 2,210 | |||||||||||||||
Bankcard, loan processing and other costs | 40,786 | 12,417 | 7,840 | 9,260 | 8,424 | |||||||||||||||
Advertising | 4,432 | 3,745 | 2,070 | 2,774 | 2,472 | |||||||||||||||
Professional services | 9,768 | 17,144 | 5,410 | 6,119 | 4,702 | |||||||||||||||
Telephone | 3,326 | 2,728 | 1,177 | 1,230 | 1,316 | |||||||||||||||
Amortization of intangibles | 2,972 | 2,411 | 317 | 444 | 456 | |||||||||||||||
FDIC insurance expense | 4,925 | 4,149 | 3,526 | 1,738 | 1,832 | |||||||||||||||
Other operating expense | 16,337 | 11,994 | 9,030 | 10,458 | 11,843 | |||||||||||||||
Total Other Expenses | $ | 211,378 | $ | 189,640 | $ | 106,925 | $ | 112,181 | $ | 108,587 | ||||||||||
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) | September 30, | September 30, | December 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2012 | |||||||||||||||
Allowance for originated loan losses - beginning of period | $ | 98,645 | $ | 103,849 | $ | 98,942 | $ | 107,699 | $ | 107,699 | |||||||||
Loans charged off: | |||||||||||||||||||
Commercial | 1,222.00 | 9,627 | 6,644.00 | 23,567 | 28,648 | ||||||||||||||
Mortgage | 501.00 | 1,691 | 1,185.00 | 3,431 | 3,964 | ||||||||||||||
Installment | 3,582.00 | 5,507 | 11,788.00 | 14,441 | 18,029 | ||||||||||||||
Home equity | 1,396.00 | 2,319 | 3,835.00 | 6,108 | 7,249 | ||||||||||||||
Credit cards | 1,367 | 1,390 | 4,229 | 4,618 | 6,171 | ||||||||||||||
Leases | — | — | 1,237.00 | — | 144 | ||||||||||||||
Overdrafts | 447.00 | 465 | 1,342.00 | 1,265 | 1,700 | ||||||||||||||
Total | 8,515 | 20,999 | 30,260 | 53,430 | 65,905 | ||||||||||||||
Recoveries: | |||||||||||||||||||
Commercial | 1,724.00 | 1,649 | 6,731.00 | 4,309 | 5,626 | ||||||||||||||
Mortgage | 39.00 | 100 | 133.00 | 191 | 235 | ||||||||||||||
Installment | 2,613.00 | 2,870 | 7,810.00 | 9,054 | 11,635 | ||||||||||||||
Home equity | 704.00 | 856 | 1,537.00 | 2,094 | 2,819 | ||||||||||||||
Credit cards | 438.00 | 488 | 1,420.00 | 1,583 | 2,138 | ||||||||||||||
Manufactured housing | 11.00 | 13 | 49.00 | 50 | 59 | ||||||||||||||
Leases | 11.00 | — | 100.00 | 38 | 38 | ||||||||||||||
Overdrafts | 98.00 | 151 | 347.00 | 494 | 622 | ||||||||||||||
Total | 5,638 | 6,127 | 18,127 | 17,813 | 23,172 | ||||||||||||||
Net charge-offs | 2,877 | 14,872 | 12,133 | 35,617 | 42,733 | ||||||||||||||
Provision for originated loan losses | 2,523 | 9,965 | 11,482 | 26,860 | 33,976 | ||||||||||||||
Allowance for originated loan losses-end of period | $ | 98,291 | $ | 98,942 | $ | 98,291 | $ | 98,942 | $ | 98,942 | |||||||||
Average originated loans | $ | 9,377,826 | $ | 8,185,507 | $ | 8,999,316 | $ | 7,970,157 | $ | 8,089,317 | |||||||||
Ratio to average originated loans: | |||||||||||||||||||
(Annualized) originated net charge-offs | 0.12 | % | 0.72 | % | 0.18 | % | 0.60 | % | 0.53 | % | |||||||||
Provision for originated loan losses | 0.11 | % | 0.48 | % | 0.17 | % | 0.45 | % | 0.42 | % | |||||||||
Originated Loans, period-end | $ | 9,789,139 | $ | 8,316,420 | $ | 9,789,139 | $ | 8,316,420 | $ | 8,731,659 | |||||||||
Allowance for credit losses: | $ | 106,784 | $ | 104,702 | $ | 106,784 | $ | 104,702 | $ | 104,375 | |||||||||
To (annualized) net charge-offs | 9.36 | 1.77 | 6.58 | 2.20 | 2.44 | ||||||||||||||
Allowance for originated loan losses: | |||||||||||||||||||
To period-end originated loans | 1.00 | % | 1.19 | % | 1.00 | % | 1.19 | % | 1.13 | % | |||||||||
To (annualized) net originated charge-offs | 8.61 | 1.67 | 6.06 | 2.08 | 2.32 | ||||||||||||||
(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. | |||||||||||||||||||
SOURCE FirstMerit Corporation
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