FIRSTMERIT CORP AKRON, Ohio, Oct. 27, 2015 /PRNewswire/ --
Quarterly Highlights include:
-- Profitability Sustained: 66(th) 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 ratio(1) 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.
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"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 basis(1) 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 revenue(1) 27.40% 25.88% 26.08%
Noninterest income, excluding gains and losses on securities transactions(1), 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 ratio(1) 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 equity(1) 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 Total Loans
Loans (2)
--------
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 Total Loans
Loans (2)
--------
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 Total Loans
Loans (2)
--------
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 Total Loans
Loans (2)
--------
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 Total Loans
Loans (2)
--------
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 SUBSIDIARIES
Average Loans by Product Type
(Unaudited)
(In thousands) Three Months Ended September 30, 2015
-------------------------------------
Originated Loans Acquired Loans (1) FDIC Acquired Total Loans
Loans (2)
--------
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 Total Loans
Loans (2)
--------
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 Total Loans
Loans (2)
--------
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 Total Loans
Loans (2)
--------
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 Total Loans
Loans (2)
--------
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 Corporation
Analyst: Thomas O'Malley/Investor Relations Officer
Phone: 330.384.7109
Media Contact: Robert Townsend/Media Relations Officer
Phone: 330.384.7075
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SOURCE FirstMerit Corporation
