EX-99.1 2 ex991.htm PRESS RELEASE EX99.1
Exhibit 99.1

FOR IMMEDIATE RELEASE

FirstMerit Corporation
Analysts: Thomas O’Malley/Investor Relations Officer
Phone: 330.384.7109    
Media Contact: Robert Townsend/Media Relations Officer
Phone: 330.384.7075


FirstMerit Reports Fourth Quarter 2011 EPS of $0.28 Per Share

Quarterly Highlights include:

•
51st consecutive quarter of profitability
•
Solid linked-quarter credit trends supported by a $9.3 million, or 10.27%, decline in non-performing assets and a $0.8 million, or 5.76%, decline in net charge-offs to 0.73% of average loans
•
Average commercial loan growth of $173.4 million, or 3.56%, from prior quarter
•
Average core deposit growth of $226.1 million, or 2.42%, from prior quarter
•
Strong tangible common equity ratio at 7.86%

Akron, Ohio (January 24, 2012) - FirstMerit Corporation (Nasdaq: FMER) reported fourth quarter 2011 net income of $30.5 million, or $0.28 per diluted share. This compares with $31.7 million, or $0.29 per diluted share, for the third quarter 2011 and $27.0 million, or $0.25 per diluted share, for the fourth quarter 2010. For the full year 2011, the Corporation reported net income of $119.6 million, or $1.10 per diluted share, compared with $102.9 million, or $1.02 per diluted share in 2010.
Returns on average common equity (“ROE”) and average assets (“ROA”) for the fourth quarter 2011 were 7.70% and 0.83%, respectively, compared with 8.02% and 0.86%, respectively, for the third quarter 2011 and 7.04% and 0.74% for the fourth quarter 2010.
    “Our strong performance in the fourth quarter capped a year of solid and profitable results in an environment that continues to challenge the financial industry and its customers,” said Paul G. Greig, chairman, president and CEO of FirstMerit Corporation. “Among our accomplishments were continued improvements of our already strong credit quality. We also maintained a strong balance sheet with ample liquidity to support consumer and commercial loan growth in both our legacy markets and Chicago. We are also moving forward on our expense management and revenue generation initiative; we are in the process of evaluating nearly 4,000 ideas submitted by employees at all levels of the Corporation and look to begin implementation on the best of these ideas in the spring of 2012.”


FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results

Mr. Greig said, “Because we have not wavered from the fundamentals of sound banking practices, we remain one of the strongest banks in the industry, providing outstanding products and service to our customers and positive returns to our shareholders.”
Net interest margin was 3.85% for the fourth quarter of 2011 compared with 3.75% for the third quarter of 2011 and 4.14% for the fourth quarter of 2010. Lower deposit costs in the fourth quarter resulting from the Corporation's continued success growing core deposits drove net interest margin expansion from the prior quarter. The increase in core deposits was a significant factor in reducing average deposit costs every quarter in 2011. The decline in net interest margin compared with the fourth quarter of 2010 is attributed to lower earning asset yields in a persistently low interest rate environment.
Average loans, not including covered loans, during the fourth quarter of 2011 increased $190.6 million, or 2.55%, compared with the third quarter of 2011 and also increased $530.6 million, or 7.43%, compared with the fourth quarter of 2010. Average commercial loans increased $173.4 million, or 3.56%, compared with the prior quarter, and increased $603.8 million, or 13.58%, compared with the year ago quarter. Commercial loans remain the primary driver in average loan portfolio growth, however, average consumer loans increased moderately for the second consecutive quarter.
Average deposits were $11.4 billion during the fourth quarter of 2011, decreasing $31.1 million, or 0.27%, compared with the third quarter of 2011, and increasing $28.1 million, or 0.25%, compared with the fourth quarter of 2010. During the fourth quarter 2011, average core deposits, which exclude time deposits, increased $226.1 million, or 2.42%, compared with the third quarter 2011 and $1.2 billion, or 14.18%, compared with the fourth quarter 2010. The Corporation has successfully executed a strategy to increase the concentration of lower cost deposits within the overall deposit mix by focusing on growth in checking, money market and savings account products with less emphasis on renewing maturing certificate of deposit accounts. In addition to efficiently funding balance sheet growth, the increased concentration in core deposit accounts generally deepens and extends the length of customer relationships. Average time deposits decreased $257.2 million, or 12.25%, and decreased $1.2 billion, or 38.65%, respectively, over prior and year-ago quarters.
Average investments decreased $195.6 million, or 5.32%, compared with the third quarter of 2011 and increased $242.5 million, or 7.49% compared with the fourth quarter of 2010. As part of the Corporation's previously announced strategy to reposition the investment portfolio and extend its current duration, approximately $395.3 million of securities were sold during the fourth quarter of 2011 of which $83.5 million was used to terminate higher cost funding in Federal Home Loan Bank ("FHLB") advances and repurchase agreements as part of a deleveraging of the portfolio. Additionally, the Corporation redeemed $20.3 million in FHLB Chicago stock.
Net interest income on a fully tax-equivalent (“FTE”) basis was $123.6 million in the fourth quarter 2011 compared with $121.8 million in the third quarter of 2011 and $130.2 million in the fourth quarter of 2010.
Noninterest income excluding securities transactions for the fourth quarter of 2011 was $53.9 million, a decrease of $2.4 million, or 4.30%, from the third quarter of 2011 and a decrease of $0.2 million, or 0.40%, from the fourth quarter of 2010. Other operating income in the fourth quarter of 2011 decreased $1.6 million, or 17.11%, compared with the prior quarter which included $2.7 million from gains on covered loans paid in full and $2.1 million from an increase in the fair value of interest rate lock commitments resulting from an increase in the mortgage pipeline partially offset by $2.7 million of insurance reimbursement of legal costs incurred and previously expensed.
Other income, net of $5.8 million in securities gains, as a percentage of net revenue for the fourth quarter of 2011 was 30.38% compared with 31.64% for third quarter of 2011 and 29.37% for the fourth quarter of 2010. Net revenue is defined as net interest income, on an FTE basis, plus other income, less

2
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results

gains from securities sales.
Noninterest expense for the fourth quarter of 2011 was $123.9 million, an increase of $7.9 million, or 6.83%, from the third quarter of 2011 and an increase of $1.4 million, or 1.16%, from the fourth quarter of 2010. Included in other operating expense in the fourth quarter of 2011 is $4.9 million of fees related to the early termination of repurchase agreements and FHLB advances as part of the Corporation's investment portfolio repositioning strategy and $1.3 million of expense related to an increase in the liability associated with the sale of our Visa® Class B shares in 2008.
During the fourth quarter of 2011, the Corporation reported an efficiency ratio of 69.46%, compared with 64.78% for the third quarter of 2011 and 65.86% for the fourth quarter of 2010.
Net charge-offs, excluding acquired loans, totaled $13.8 million, or 0.73% of average loans, excluding acquired loans, in the fourth quarter of 2011, compared with $14.6 million, or 0.79% of average loans, in the third quarter 2011 and $21.7 million, or 1.25% of average loans, in the fourth quarter of 2010.
Nonperforming assets totaled $81.1 million at December 31, 2011, a decrease of $9.3 million, or 10.27%, compared with September 30, 2011 and a decrease of $42.4 million, or 34.34%, compared with December 31, 2010. Nonperforming assets at December 31, 2011 represented 1.06% of period-end loans plus other real estate compared with 1.21% at September 30, 2011 and 1.78% at December 31, 2010.
The allowance for noncovered loan losses totaled $107.7 million at December 31, 2011. At December 31, 2011, the allowance for noncovered loan losses was 1.41% of period-end loans compared with 1.46% at September 30, 2011 and 1.65% at December 31, 2010. The allowance for credit losses is the sum of the allowance for noncovered loan losses and the reserve for unfunded lending commitments. For comparative purposes the allowance for credit losses was 1.49% of period end loans, excluding acquired loans, at December 31, 2011, compared with 1.55% at September 30, 2011 and 1.78% at December 31, 2010. The allowance for credit losses to nonperforming loans was 176.50% at December 31, 2011, compared with 169.42% at September 30, 2011 and 118.01% at December 31, 2010.
The Corporation’s total assets at December 31, 2011 were $14.4 billion, a decrease of $246.6 million, or 1.68%, compared with September 30, 2011 and an increase of $304.8 million, or 2.16%, compared with December 31, 2010.
Total deposits were $11.4 billion at December 31, 2011, an increase of $35.5 million, or 0.31%, from September 30, 2011 and an increase of $163.6 million, or 1.45%, from December 31, 2010. Core deposits totaled $9.7 billion at December 31, 2011, an increase of $235.9 million, or 2.50% from September 30, 2011 and an increase of $1.2 billion, or 14.38%, from December 31, 2010.
Shareholders’ equity was $1.6 billion at December 31, 2011, compared with $1.6 billion at September 30, 2011, and $1.5 billion at December 31, 2010. The Corporation maintained a strong capital position as tangible common equity to assets was 7.86% at December 31, 2011, compared with 7.75% at September 30, 2011 and 7.59% at December 31, 2010. The common cash dividend per share paid in the fourth quarter 2011 was $0.16.
Fourth Quarter 2011 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 fourth 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: 41325090. A replay of the conference call will be available at approximately 2:00 p.m. (Eastern Time) on January 24, 2012 through February 7, 2012 by dialing (855) 859-2056, and entering the PIN: 41325090. The Corporation will provide a slide presentation, which management will speak to during the

3
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results

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.
About FirstMerit Corporation
FirstMerit Corporation is a diversified financial services company headquartered in Akron, Ohio, with assets of $14.4 billion as of December 31, 2011 and 206 banking offices and 214 ATMs in Ohio, Western Pennsylvania, and Chicago areas. FirstMerit provides a complete range of banking and other financial services to consumers and businesses through its core operations. Principal wholly-owned subsidiaries 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 year ended December 31, 2011 on Form 10-K. As a result, the Corporation will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2011 and will adjust amounts preliminarily reported, if necessary.
Forward-Looking Statement
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 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.




4
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results


 
FIRSTMERIT CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
Consolidated Financial Highlights
 
 
 
 
 
 
 
 
 
Quarters
 
 
 
(Unaudited)
2011
2011
2011
2011
2010
 
(Dollars in thousands)
4th Qtr
3rd Qtr
2nd Qtr
1st Qtr
4th Qtr
 
EARNINGS
 
 
 
 
 
 
Net interest income FTE (a)
$
123,598

$
121,788

$
119,735

$
124,191

$
130,227

 
Provision for noncovered loan losses
12,275

14,604

10,138

17,018

19,816

 
Provision for covered loan losses
2,773

4,768

7,481

5,331

3,572

 
Other income
59,737

60,772

51,491

52,756

54,311

 
Other expenses
123,874

115,957

110,068

114,445

122,452

 
FTE adjustment (a)
2,632

2,396

2,292

2,367

2,363

 
Net income
30,496

31,737

29,763

27,560

27,030

 
Diluted EPS
0.28

0.29

0.27

0.25

0.25

 
PERFORMANCE RATIOS
 
 
 
 
 
 
Return on average assets (ROA)
0.83
%
0.86
%
0.82
%
0.78
%
0.74
%
 
Return on average common equity (ROE)
7.70
%
8.02
%
7.78
%
7.37
%
7.04
%
 
Net interest margin FTE (a)
3.85
%
3.75
%
3.77
%
4.01
%
4.14
%
 
Efficiency ratio
69.46
%
64.78
%
64.30
%
64.37
%
65.86
%
 
Number of full-time equivalent employees
3,018

3,016

3,028

3,056

3,058

 
MARKET DATA
 
 
 
 
 
 
Book value/common share
$
14.33

$
14.38

$
14.19

$
13.98

$
13.86

 
Period-end common share mkt value
15.13

11.36

16.51

17.07

19.79

 
Market as a % of book
106
%
79
%
116
%
122
%
143
%
 
Cash dividends/common share
$
0.16

$
0.16

$
0.16

$
0.16

$
0.16

 
Common stock dividend payout ratio
57.14
%
55.17
%
59.26
%
64.00
%
64.41
%
 
Average basic common shares
109,249

109,245

109,138

108,769

108,807

 
Average diluted common shares
109,249

109,246

109,139

108,770

108,808

 
Period end common shares
109,251

109,247

109,241

108,734

108,817

 
Common shares repurchased
7

10

45

91

9

 
Common stock market capitalization
$
1,652,968

$
1,241,046

$
1,803,569

$
1,856,089

$
2,153,479

 
ASSET QUALITY (excluding acquired loans)
 
 
 
 
 
 
Gross charge-offs
$
18,984

$
20,014

$
20,958

$
22,812

$
27,553

 
Net charge-offs
13,763

14,604

15,641

17,018

21,654

 
Allowance for noncovered loan losses
107,699

109,187

109,187

114,690

114,690

 
Reserve for unfunded lending commitments
6,373

6,360

5,799

7,202

8,849

 
Nonperforming assets (NPAs) (b)
81,094

90,375

99,846

112,759

123,502

 
Net charge-offs/average loans ratio (b)
0.73
%
0.79
%
0.89
%
0.99
%
1.25
%
 
Allowance for noncovered loan losses/period-end loans (b)
1.41
%
1.46
%
1.51
%
1.64
%
1.65
%
 
Allowance for credit losses/period-end loans (b)
1.49
%
1.55
%
1.59
%
1.74
%
1.78
%
 
NPAs/loans and other real estate (b)
1.06
%
1.21
%
1.38
%
1.61
%
1.78
%
 
Allowance for noncovered loan losses/nonperforming loans
166.64
%
160.09
%
150.31
%
138.67
%
109.56
%
 
Allowance for credit losses/nonperforming loans
176.50
%
169.42
%
158.30
%
147.38
%
118.01
%
 
CAPITAL & LIQUIDITY
 
 
 
 
 
 
Period-end tangible common equity to assets
7.86
%
7.75
%
7.79
%
7.50
%
7.59
%
 
Average equity to assets
10.75
%
10.75
%
10.59
%
10.62
%
10.51
%
 
Average equity to total loans (c)
17.40
%
17.55
%
17.36
%
17.14
%
17.15
%
 
Average total loans to deposits (c)
79.12
%
78.18
%
77.05
%
78.14
%
78.00
%
 
AVERAGE BALANCES
 
 
 
 
 
 
Assets
$
14,623,441

$
14,610,628

$
14,481,208

$
14,270,871

$
14,493,060

 
Deposits
11,416,546

11,447,682

11,464,738

11,319,809

11,388,423

 
Loans, excluding acquired loans (c)
7,520,400

7,298,446

7,080,109

6,963,389

6,868,222

 
Acquired loans, including covered loans (c)
1,512,123

1,651,559

1,753,942

1,881,540

2,014,361

 
Earning assets
12,747,868

12,878,105

12,724,269

12,560,913

12,466,629

 
Shareholders' equity
1,572,061

1,570,411

1,533,855

1,516,227

1,523,078

 
ENDING BALANCES
 
 
 
 
 
 
Assets
$
14,441,702

$
14,688,278

$
14,347,557

$
14,466,509

$
14,134,714

 
Deposits
11,431,609

11,396,121

11,340,939

11,395,946

11,268,006

 
Loans, excluding acquired loans (c)
7,635,776

7,453,612

7,216,015

6,989,973

6,937,142

 
Acquired loans, including covered loans (c)
1,404,644

1,604,707

1,707,887

1,800,525

1,953,093

 
Goodwill
460,044

460,044

460,044

460,044

460,044

 
Intangible assets
8,239

8,782

9,325

9,868

10,411

 
Earning assets
13,011,267

12,769,183

12,926,211

12,659,414

12,427,936

 
Total shareholders' equity
1,565,953

1,570,654

1,550,387

1,519,957

1,507,715

 
NOTES:
 
 
 
 
 
 
(a) - Net interest income on a fully tax-equivalent ("FTE") basis restates interest on tax-exempt securities and loans as if such interest were subject to federal income tax at the statutory rate. Net interest income on an FTE basis is not an accounting principle generally accepted in the United States of America.
 
 
(b) - As required by current accounting guidance, the acquired loans and other real estate from First Bank, George Washington Savings Bank and Midwest Bank & Trust Company were recorded at fair value with no carryover of the related allowances. The ratio of our allowance for loan and credit losses and NPAs do not include these loans and other real estate.
 
(c) - Excludes loss share receivable of $205.7 million, $220.5 million, $239.4 million, $266.0 million, and $288.6 million as of December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011, and December 31, 2010, respectively.
 
 
 
 
 
 
 

5
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results

FIRSTMERIT CORPORATION AND SUBSIDIARIES
 
 
 
 
CONSOLIDATED BALANCE SHEETS
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
December 31,
(Unaudited, except December 31, 2010, which is derived from the audited financial statements)
 
2011
 
2010
ASSETS
 
 
 
 
 
Cash and due from banks
$
219,256

$
157,415

 
Interest bearing-deposits in banks
 
158,063

 
365,698

 
 
Total cash and cash equivalents
 
377,319

 
523,113

 
Investment securities
 
 
 
 
 
 
Held-to-maturity
 
82,764

 
59,962

 
 
Available-for-sale
 
3,353,553

 
2,987,040

 
 
Other investments
 
140,726

 
160,752

 
Loans held for sale
 
30,077

 
41,340

 
Noncovered loans:
 
 
 
 
 
 
Commercial loans
 
5,107,747

 
4,527,497

 
 
Mortgage loans
 
413,664

 
403,843

 
 
Installment loans
 
1,263,665

 
1,308,860

 
 
Home equity loans
 
743,982

 
749,378

 
 
Credit card loans
 
146,356

 
149,506

 
 
Leases
 
73,530

 
63,004

 
 
 
Total noncovered loans
 
7,748,944

 
7,202,088

 
 
 
   Allowance for noncovered loan losses
 
(107,699
)
 
(114,690
)
 
 
 
Net noncovered loans
 
7,641,245

 
7,087,398

 
Covered loans (includes loss share receivable of $205.7 million and $288.6 million at December 31, 2011 and 2010, respectively)
 
1,497,140

 
1,976,754

 
 
 
   Allowance for covered loan losses
 
(36,417
)
 
(13,733
)
 
 
 
Net covered loans
 
1,460,723

 
1,963,021

 
 
 
Net loans
 
9,101,968

 
9,050,419

 
Premises and equipment, net
 
192,949

 
197,866

 
Goodwill
 
460,044

 
460,044

 
Intangible assets
 
8,239

 
10,411

 
Other real estate covered by FDIC loss share
 
54,505

 
54,710

 
Accrued interest receivable and other assets
 
639,558

 
589,057

 
 
 
    Total assets
$
14,441,702

$
14,134,714

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
Deposits:
 
 
 
 
 
 
Demand-non-interest bearing
$
3,030,225

$
2,790,550

 
 
Demand-interest bearing
 
1,062,896

 
868,404

 
 
Savings and money market accounts
 
5,595,409

 
4,811,784

 
 
Certificates and other time deposits
 
1,743,079

 
2,797,268

 
 
 
Total deposits
 
11,431,609

 
11,268,006

 
 
Federal funds purchased and securities sold under agreements to repurchase
 
866,265

 
777,585

 
 
Wholesale borrowings
 
203,462

 
326,007

 
 
Accrued taxes, expenses, and other liabilities
 
374,413

 
255,401

 
 
 
Total liabilities
 
12,875,749

 
12,626,999

 
 
Shareholders' equity:
 
 
 
 
 
 
 
Preferred stock, without par value:
 
 
 
 
 
 
 
authorized and unissued 7,000,000 shares
 
—

 
—

 
 
 
Preferred stock, Series A, without par value:
 
 
 
 
 
 
 
designated 800,000 shares; none outstanding
 
—

 
—

 
 
 
Convertible preferred stock, Series B, without par value:
 
 
 
 
 
 
 
designated 220,000 shares; none outstanding
 
—

 
—

 
 
 
Common stock, without par value; authorized 300,000,000 shares; issued: 2011 and 2010 - 115,121,731 shares
 
127,937

 
127,937

 
 
 
Capital surplus
 
479,882

 
485,567

 
 
 
Accumulated other comprehensive loss
 
(23,887
)
 
(26,103
)
 
 
 
Retained earnings
 
1,131,203

 
1,080,900

 
 
 
Treasury stock, at cost: 2011 - 5,870,923 shares; 2010 - 6,305,218 shares
 
(149,182
)
 
(160,586
)
 
 
 
Total shareholders' equity
 
1,565,953

 
1,507,715

 
 
 
    Total liabilities and shareholders' equity
$
14,441,702

$
14,134,714

 
 
 
 
 
 
 
 

6
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results


FIRSTMERIT CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
AVERAGE CONSOLIDATED BALANCE SHEETS
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Periods
(Unaudited)
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
(Dollars in thousands)
 
2011
 
2011
 
2011
 
2011
 
2010
ASSETS
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
621,899

$
517,150

$
588,487

$
520,602

$
809,828

Investment securities
 
 
 
 
 
 
 
 
 
 
Held-to-maturity
 
89,166

 
85,664

 
79,012

 
64,212

 
64,287

Available-for-sale
 
3,231,195

 
3,429,631

 
3,382,943

 
3,194,751

 
3,012,983

Other investments
 
160,147

 
160,799

 
160,811

 
160,752

 
160,756

Loans held for sale
 
24,215

 
24,524

 
18,512

 
22,574

 
39,174

Noncovered loans:
 
 
 
 
 
 
 
 
 
 
Commercial loans
 
5,049,479

 
4,876,034

 
4,665,550

 
4,553,777

 
4,445,691

Mortgage loans
 
405,329

 
399,228

 
398,702

 
403,758

 
403,334

Installment loans
 
1,267,952

 
1,264,868

 
1,270,589

 
1,294,156

 
1,331,130

Home equity loans
 
744,326

 
741,497

 
736,117

 
741,596

 
754,270

Credit card loans
 
145,560

 
144,796

 
143,528

 
146,526

 
146,744

Leases
 
61,267

 
56,909

 
58,607

 
61,768

 
62,115

Total noncovered loans
 
7,673,913

 
7,483,332

 
7,273,093

 
7,201,581

 
7,143,284

Covered loans and loss share receivable
 
1,569,232

 
1,694,155

 
1,809,898

 
1,917,043

 
2,046,145

Total loans
 
9,243,145

 
9,177,487

 
9,082,991

 
9,118,624

 
9,189,429

Less: allowance for loan losses
 
141,360

 
138,441

 
143,721

 
134,064

 
119,924

Net loans
 
9,101,785

 
9,039,046

 
8,939,270

 
8,984,560

 
9,069,505

Total earning assets
 
12,747,868

 
12,878,105

 
12,724,269

 
12,560,913

 
12,466,629

Premises and equipment, net
 
193,219

 
192,218

 
192,584

 
195,296

 
195,915

Accrued interest receivable and other assets
 
1,201,815

 
1,161,596

 
1,119,589

 
1,128,124

 
1,140,612

TOTAL ASSETS
$
14,623,441

$
14,610,628

$
14,481,208

$
14,270,871

$
14,493,060

LIABILITIES
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
Demand-non-interest bearing
$
3,013,543

$
2,988,521

$
2,998,090

$
2,874,884

$
2,816,850

Demand-interest bearing
 
991,456

 
913,252

 
824,125

 
841,545

 
857,960

Savings and money market accounts
 
5,569,213

 
5,446,351

 
5,279,353

 
4,978,773

 
4,710,682

Certificates and other time deposits
 
1,842,334

 
2,099,558

 
2,363,170

 
2,624,607

 
3,002,931

Total deposits
 
11,416,546

 
11,447,682

 
11,464,738

 
11,319,809

 
11,388,423

Federal funds purchased and securities sold under
 
 
 
 
 
 
 
 
 
 
agreements to repurchase
 
999,639

 
969,020

 
884,244

 
848,169

 
904,163

Wholesale borrowings
 
225,116

 
320,691

 
325,057

 
325,296

 
368,397

Total funds
 
12,641,301

 
12,737,393

 
12,674,039

 
12,493,274

 
12,660,983

Accrued taxes, expenses and other liabilities
 
410,079

 
302,824

 
273,314

 
261,370

 
308,999

Total liabilities
 
13,051,380

 
13,040,217

 
12,947,353

 
12,754,644

 
12,969,982

SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Common stock
 
127,937

 
127,937

 
127,937

 
127,937

 
127,937

Capital surplus
 
479,257

 
477,864

 
479,078

 
486,907

 
485,126

Accumulated other comprehensive loss
 
(15,198
)
 
(2,211
)
 
(16,402
)
 
(26,703
)
 
(9,867
)
Retained earnings
 
1,129,392

 
1,116,207

 
1,095,270

 
1,089,554

 
1,080,809

Treasury stock
 
(149,327
)
 
(149,386
)
 
(152,028
)
 
(161,468
)
 
(160,927
)
Total shareholders' equity
 
1,572,061

 
1,570,411

 
1,533,855

 
1,516,227

 
1,523,078

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
14,623,441

$
14,610,628

$
14,481,208

$
14,270,871

$
14,493,060

 
 
 
 
 
 
 
 
 
 
 

7
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results


FIRSTMERIT CORPORATION AND SUBIDARIES
 
 
 
 
 
 
AVERAGE CONSOLIDATED BALANCE SHEETS
Fully Tax-equivalent Interest Rates and Interest Differential
 
 
 
 
 
 
 
Three months ended
 
Three months ended
 
 
December 31, 2011
 
December 31, 2010
(Unaudited)
 
Average
 
 
 
Average
 
Average
 
 
 
Average
(Dollars in thousands)
 
Balance
 
Interest
 
Rate
 
Balance
 
Interest
 
Rate
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
621,899

 
 
 
 
$
809,828

 
 
 
 
Investment securities and federal funds sold:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and U.S. Government
 
 
 
 
 
 
 
 
 
 
 
 
agency obligations (taxable)
 
2,761,042

 
19,028

 
2.73
%
 
2,579,880

 
19,337

 
2.97
%
Obligations of states and political
 
 
 
 
 
 
 
 
 
 
 
 
subdivisions (tax exempt)
 
403,405

 
5,568

 
5.48
%
 
352,330

 
5,329

 
6.00
%
Other securities and federal funds sold
 
316,061

 
2,406

 
3.02
%
 
305,816

 
2,158

 
2.80
%
Total investment securities and federal
 
 
 
 
 
 
 
 
 
 
 
 
funds sold
 
3,480,508

 
27,002

 
3.08
%
 
3,238,026

 
26,824

 
3.29
%
Loans held for sale
 
24,215

 
266

 
4.36
%
 
39,174

 
470
 
4.76
%
Noncovered loans, covered loans and loss share
 
 
 
 
 
 
 
 
 
 
 
 
receivable
 
9,243,145

 
107,612

 
4.62
%
 
9,189,429

 
121,434

 
5.24
%
Total earning assets
 
12,747,868

 
134,880

 
4.20
%
 
12,466,629

 
148,728

 
4.73
%
Allowance for loan losses
 
(141,360
)
 
 
 
 
 
(119,924
)
 
 
 
 
Other assets
 
1,395,034

 
 
 
 
 
1,335,616

 
 
 
 
Total assets
$
14,623,441

 
 
 
 
$
14,492,149

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Demand - non-interest bearing
$
3,013,543

 
—

 
—

$
2,816,850

 
—

 
—

Demand - interest bearing
 
991,456

 
237

 
0.09
%
 
857,960

 
198

 
0.09
%
Savings and money market accounts
 
5,569,213

 
5,999

 
0.43
%
 
4,710,682

 
8,145

 
0.69
%
Certificates and other time deposits
 
1,842,334

 
3,201

 
0.69
%
 
3,002,931

 
7,209

 
0.95
%
Total deposits
 
11,416,546

 
9,437

 
0.33
%
 
11,388,423

 
15,552

 
0.54
%
Securities sold under agreements to repurchase
 
999,639

 
512

 
0.20
%
 
904,163

 
960

 
0.42
%
Wholesale borrowings
 
225,116

 
1,334

 
2.35
%
 
368,397

 
1,989

 
2.14
%
Total interest bearing liabilities
 
9,627,758

 
11,283

 
0.46
%
 
9,844,133

 
18,501

 
0.75
%
Other liabilities
 
410,079

 
 
 
 
 
308,088

 
 
 
 
Shareholders' equity
 
1,572,061

 
 
 
 
 
1,523,078

 
 
 
 
Total liabilities and shareholders' equity
$
14,623,441

 
 
 
 
$
14,492,149

 
 
 
 
Net yield on earning assets
$
12,747,868

 
123,597

 
3.85
%
$
12,466,629

 
130,227

 
4.14
%
Interest rate spread
 
 
 
 
 
3.73
%
 
 
 
 
 
3.99
%
 
 
 
 
 
 
 
 
 
 
 
 
 
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.

8
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results


FIRST MERIT CORPORATION AND SUBSIDARIES
 
 
 
 
 
 
 
 
AVERAGE CONSOLIDATED BALANCE SHEETS
Fully Tax-equivalent Interest Rates and Interest Differential
 
 
 
 
 
 
 
Twelve months ended
 
Twelve months ended
 
 
December 31, 2011
 
December 31, 2010
(Unaudited)
 
Average
 
 
 
Average
 
Average
 
 
 
Average
(Dollars in thousands)
 
Balance
 
Interest
 
Rate
 
Balance
 
Interest
 
Rate
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
562,133

 
 
 
 
$
728,723

 
 
 
 
Investment securities and federal funds sold:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and U.S. Government
 
 
 
 
 
 
 
 
 
 
 
 
agency obligations (taxable)
 
2,869,664

 
78,202

 
2.73
%
 
2,554,538

 
87,019

 
3.41
%
Obligations of states and political
 
 
 
 
 
 
 
 
 
 
 
 
subdivisions (tax exempt)
 
378,834

 
21,277

 
5.62
%
 
348,832

 
21,454

 
6.15
%
Other securities and federal funds sold
 
301,786

 
8,842

 
2.93
%
 
300,700

 
8,508

 
2.83
%
Total investment securities and federal
 
 
 
 
 
 
 
 
 
 
 
 
funds sold
 
3,550,284

 
108,321

 
3.05
%
 
3,204,070

 
116,981

 
3.65
%
Loans held for sale
 
22,467

 
1,045

 
4.65
%
 
23,612

 
1,162

 
4.92
%
Noncovered loans, covered loans and loss share
 
 
 
 
 
 
 
 
 
 
 
 
receivable
 
9,155,973

 
438,579

 
4.79
%
 
8,529,303

 
433,308

 
5.08
%
Total earning assets
 
12,728,724

 
547,945

 
4.30
%
 
11,756,985

 
551,451

 
4.69
%
Allowance for loan losses
 
(139,414
)
 
 
 
 
 
(116,118
)
 
 
 
 
Other assets
 
1,343,887

 
 
 
 
 
1,154,761

 
 
 
 
Total assets
$
14,495,330

 
 
 
 
$
13,524,351

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
Demand - non-interest bearing
$
2,969,137

 
—

 
—

$
2,550,849

 
—

 
—

Demand - interest bearing
 
893,062

 
816

 
0.09
%
 
794,497

 
751
 
0.09
%
Savings and money market accounts
 
5,320,392

 
28,171

 
0.53
%
 
4,303,815

 
31,912

 
0.74
%
Certificates and other time deposits
 
2,229,910

 
20,003

 
0.90
%
 
2,801,270

 
32,713

 
1.17
%
Total deposits
 
11,412,501

 
48,990

 
0.43
%
 
10,450,431

 
65,376

 
0.63
%
Securities sold under agreements to repurchase
 
925,803

 
3,344

 
0.36
%
 
907,015

 
4,477

 
0.49
%
Wholesale borrowings
 
298,835

 
6,295

 
2.11
%
 
510,799

 
13,998

 
2.74
%
Total interest bearing liabilities
 
9,668,002

 
58,629

 
0.61
%
 
9,317,396

 
83,851

 
0.90
%
Other liabilities
 
309,838

 
 
 
 
 
340,485

 
 
 
 
Shareholders' equity
 
1,548,353

 
 
 
 
 
1,315,621

 
 
 
 
Total liabilities and shareholders' equity
$
14,495,330

 
 
 
 
$
13,524,351

 
 
 
 
Net yield on earning assets
$
12,728,724

 
489,316

 
3.84
%
$
11,756,985

 
467,600

 
3.98
%
Interest rate spread
 
 
 
 
 
3.70
%
 
 
 
 
 
3.79
%
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.

9
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results


FIRSTMERIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Quarters ended
 
Twelve months ended
(Dollars in thousands except per share data)
 
December 31,
 
December 31,
 
 
 
 
 
2011
 
2010
 
2011
 
2010
Interest income:
 
 
 
 
 
 
 
 
 
Loans and loans held for sale
$
107,516

$
121,651

$
438,393

$
433,763

 
Investment securities
 
 
 
 
 
 
 
 
 
 
Taxable
 
21,434

 
21,495

 
87,044

 
95,527

 
 
Tax-exempt
 
3,298

 
3,219

 
12,819

 
13,080

 
 
Total investment securities interest
 
24,732

 
24,714

 
99,863

 
108,607

 
 
 
Total interest income
 
132,248

 
146,365

 
538,256

 
542,370

Interest expense:
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
Demand-interest bearing
 
237

 
198
 
816

 
751
 
 
Savings and money market accounts
 
5,998

 
8,145

 
28,171

 
31,912

 
 
Certificates and other time deposits
 
3,201

 
7,209

 
20,003

 
32,713

 
Securities sold under agreements to repurchase
 
512

 
960
 
3,344

 
4,477

 
Wholesale borrowings
 
1,334

 
1,989

 
6,295

 
13,998

 
 
Total interest expense
 
11,282

 
18,501

 
58,629

 
83,851

 
 
Net interest income
 
120,966

 
127,864

 
479,627

 
458,519

Provision for noncovered loan losses
 
12,275

 
19,816

 
54,035

 
83,783

Provision for covered loan losses
 
2,773

 
3,572

 
20,353

 
4,432

 
 
Net interest income after provision for loan losses
 
105,918

 
104,476

 
405,239

 
370,304

Other income:
 
 
 
 
 
 
 
 
 
Trust department income
 
5,413

 
5,627

 
22,396

 
21,951

 
Service charges on deposits
 
15,622

 
15,938

 
64,082

 
65,900

 
Credit card fees
 
10,182

 
12,678

 
49,539

 
49,010

 
ATM and other service fees
 
3,920

 
2,910

 
13,701

 
11,259

 
Bank owned life insurance income
 
3,381

 
3,192

 
14,820

 
14,949

 
Investment services and insurance
 
1,844

 
2,300

 
8,228

 
9,451

 
Investment securities gains, net
 
5,790

 
146
 
11,081

 
855
 
Loan sales and servicing income
 
5,875

 
9,221

 
14,533

 
19,440

 
Gain on George Washington acquisition
 
—

 
—

 
—

 
1,041

 
Other operating income
 
7,710

 
2,299

 
26,377

 
18,700

 
 
Total other income
 
59,737

 
54,311

 
224,757

 
212,556

Other expenses:
 
 
 
 
 
 
 
 
 
Salaries, wages, pension and employee benefits
 
62,546

 
62,331

 
240,362

 
221,316

 
Net occupancy expense
 
7,270

 
9,236

 
32,414

 
32,665

 
Equipment expense
 
7,234

 
7,549

 
27,959

 
27,664

 
Stationery, supplies and postage
 
2,719

 
3,183

 
10,691

 
11,438

 
Bankcard, loan processing and other costs
 
7,948

 
7,810

 
32,226

 
31,572

 
Professional services
 
5,763

 
7,731

 
23,229

 
29,357

 
Amortization of intangibles
 
543

 
1,006

 
2,172

 
2,914

 
FDIC insurance expense
 
5,119

 
4,342

 
17,306

 
17,790

 
Other operating expense
 
24,732

 
19,264

 
77,986

 
68,144

 
 
Total other expenses
 
123,874

 
122,452

 
464,345

 
442,860

 
 
 
Income before income tax expense
 
41,781

 
36,335

 
165,651

 
140,000

Income tax expense
 
11,285

 
9,305

 
46,093

 
37,091

 
 
 
Net income
$
30,496

$
27,030

$
119,558

$
102,909

Other comprehensive income, net of taxes
 
 
 
 
 
 
 
 
 
Changes in unrealized securities' holding gains and losses
$
1,317

$
(21,560
)
$
26,205

$
(555
)
 
Reclassification for realized securities' gains
 
(3,764
)
 
(95
)
 
(7,203
)
 
(556
)
 
Change in minimum pension liability
 
(16,786
)
 
467
 
(16,786
)
 
467
 
Total other comprehensive gain (loss), net of taxes
 
(19,233
)
 
(21,188
)
 
2,216

 
(644
)
 
 
Comprehensive income
$
11,263

$
5,842

$
121,774

$
102,265

 
Net income applicable to common shares
$
30,496

$
27,030

$
119,558

$
102,909

 
Net income used in diluted EPS calculation
$
30,496

$
27,030

$
119,558

$
102,909

Weighted average number of common shares outstanding - basic
 
109,249

 
108,807

 
109,102

 
101,163

Weighted average number of common shares outstanding - diluted
 
109,249

 
108,808

 
109,102

 
101,165

Basic earnings per common share
$
0.28

$
0.25

$
1.10

$
1.02

Diluted earnings per common share
$
0.28

$
0.25

$
1.10

$
1.02

Dividend per common share
$
0.16

$
0.16

$
0.64

$
0.64

 
 
 
 
 
 
 
 
 
 
 
 

10
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results


FIRSTMERIT CORPORATION AND SUBSIDIARIES
 
 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME---LINKED QUARTERS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarterly Results
(Unaudited)
 
2011
 
2011
 
2011
 
2011
 
2010
(Dollars in thousands, except share data)
 
4th Qtr
 
3rd Qtr
 
2nd Qtr
 
1st Qtr
 
4th Qtr
Loans and loans held for sale
$
107,516

$
108,417

$
107,904

$
114,555

$
121,651

Investment securities
 
24,732

 
25,138

 
25,313

 
24,680

 
24,714

Total interest income
 
132,248

 
133,555

 
133,217

 
139,235

 
146,365

Interest on deposits:
 
 
 
 
 
 
 
 
 
 
Demand-interest bearing
 
237

 
218

 
177

 
184

 
198

Savings and money market accounts
 
5,998

 
6,929

 
7,398

 
7,845

 
8,145

Certificates and other time deposits
 
3,201

 
4,370

 
5,606

 
6,827

 
7,209

Securities sold under agreements to repurchase
 
512

 
977

 
940

 
915

 
960

Wholesale borrowings
 
1,334

 
1,669

 
1,653

 
1,640

 
1,989

Total interest expense
 
11,282

 
14,163

 
15,774

 
17,411

 
18,501

Net interest income
 
120,966

 
119,392

 
117,443

 
121,824

 
127,864

Provision for noncovered loan losses
 
12,275

 
14,604

 
10,138

 
17,018

 
19,816

Provision for covered loan losses
 
2,773

 
4,768

 
7,481

 
5,331

 
3,572

Net interest income after provision for loan losses
 
105,918

 
100,020

 
99,824

 
99,475

 
104,476

Other income:
 
 
 
 
 
 
 
 
 
 
Trust department income
 
5,413

 
5,607

 
5,863

 
5,514

 
5,627

Service charges on deposits
 
15,622

 
17,838

 
15,712

 
14,910

 
15,938

Credit card fees
 
10,182

 
13,640

 
13,510

 
12,207

 
12,678

ATM and other service fees
 
3,920

 
3,801

 
3,063

 
2,917

 
2,910

Bank owned life insurance income
 
3,381

 
3,182

 
3,015

 
5,241

 
3,192

Investment services and insurance
 
1,844

 
1,965

 
1,972

 
2,447

 
2,300

Investment securities gains, net
 
5,790

 
4,402

 
889

 
—

 
146

Loan sales and servicing income
 
5,875

 
1,036

 
2,609

 
5,012

 
9,221

Other operating income
 
7,710

 
9,301

 
4,858

 
4,508

 
2,299

Total other income
 
59,737

 
60,772

 
51,491

 
52,756

 
54,311

Other expenses:
 
 
 
 
 
 
 
 
 
 
Salaries, wages, pension and employee benefits
 
62,546

 
61,232

 
56,713

 
59,871

 
62,331

Net occupancy expense
 
7,270

 
8,464

 
8,086

 
8,594

 
9,236

Equipment expense
 
7,234

 
7,073

 
6,816

 
6,836

 
7,549

Stationery, supplies and postage
 
2,719

 
2,517

 
2,750

 
2,705

 
3,183

Bankcard, loan processing and other costs
 
7,948

 
8,449

 
8,266

 
7,562

 
7,810

Professional services
 
5,763

 
5,732

 
5,940

 
5,793

 
7,731

Amortization of intangibles
 
543

 
543

 
543

 
543

 
1,006

FDIC insurance expense
 
5,119

 
3,240

 
4,581

 
4,366

 
4,342

Other operating expense
 
24,732

 
18,707

 
16,373

 
18,175

 
19,264

Total other expenses
 
123,874

 
115,957

 
110,068

 
114,445

 
122,452

Income before income tax expense
 
41,781

 
44,835

 
41,247

 
37,786

 
36,335

Income taxes
 
11,285

 
13,098

 
11,484

 
10,226

 
9,305

Net income
$
30,496

$
31,737

$
29,763

$
27,560

$
27,030

Other comprehensive income (loss), net of taxes
 
(19,233
)
 
4,491

 
16,620

 
338

 
(21,188
)
Comprehensive income
$
11,263

$
36,228

$
46,383

$
27,898

$
5,842

Net income applicable to common shares
$
30,496

$
31,737

$
29,763

$
27,560

$
27,030

Net income used in diluted EPS calculation
$
30,496

$
31,737

$
29,763

$
27,560

$
27,030

Weighted-average common shares - basic
 
109,249

 
109,245

 
109,138

 
108,769

 
108,807

Weighted-average common shares - diluted
 
109,249

 
109,246

 
109,139

 
108,770

 
108,808

Basic earnings per common share
$
0.28

$
0.29

$
0.27

$
0.25

$
0.25

Diluted earnings per common share
$
0.28

$
0.29

$
0.27

$
0.25

$
0.25

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

11
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results


FIRSTMERIT CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
ASSET QUALITY INFORMATION (excluding Acquired Assets)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited, except December 31, 2010 annual period
 
 
 
 
 
 
 
 
 
 
 
 
which is derived from the audited financial statements)
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands, except ratios)
 
Quarterly Periods
 
Annual Period
 
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
December 31,
Allowance for Credit Losses
 
2011
 
2011
 
2011
 
2011
 
2010
 
2010
Allowance for noncovered loan losses, beginning of period
$
109,187

$
109,187

$
114,690

$
114,690

$
116,528

$
115,092

Provision for noncovered loan losses
 
12,275

 
14,604

 
10,138

 
17,018

 
19,816

 
83,783

Charge-offs
 
18,984

 
20,014

 
20,958

 
22,812

 
27,553

 
104,532

Recoveries
 
5,221

 
5,410

 
5,317

 
5,794

 
5,899

 
20,347

Net charge-offs
 
13,763

 
14,604

 
15,641

 
17,018

 
21,654

 
84,185

Allowance for noncovered loan losses, end of period
$
107,699

$
109,187

$
109,187

$
114,690

$
114,690

$
114,690

Reserve for unfunded lending commitments,
 
 
 
 
 
 
 
 
 
 
 
 
beginning of period
$
6,360

$
5,799

$
7,202

$
8,849

$
7,864

$
5,751

Provision for/(relief of) credit losses
 
13

 
561

 
(1,403
)
 
(1,647
)
 
985

 
3,098

Reserve for unfunded lending commitments,
 
 
 
 
 
 
 
 
 
 
 
 
end of period
$
6,373

$
6,360

$
5,799

$
7,202

$
8,849

$
8,849

Allowance for Credit Losses
$
114,072

$
115,547

$
114,986

$
121,892

$
123,539

$
123,539

Ratios (a)
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses as a % of average loans
 
0.65
%
 
0.79
%
 
0.57
 %
 
0.99
 %
 
1.14
%
 
1.23
%
Provision for credit losses as a % of average loans
 
0.00
%
 
0.03
%
 
(0.08
)%
 
(0.10
)%
 
0.06
%
 
0.05
%
Net charge-offs as a % of average loans
 
0.73
%
 
0.79
%
 
0.89
 %
 
0.99
 %
 
1.25
%
 
1.23
%
Allowance for loan losses as a % of period-end loans
 
1.41
%
 
1.46
%
 
1.51
 %
 
1.64
 %
 
1.65
%
 
1.65
%
Allowance for credit losses as a % of period-end loans
 
1.49
%
 
1.55
%
 
1.59
 %
 
1.74
 %
 
1.78
%
 
1.78
%
Allowance for loan losses as a % of nonperforming loans
 
166.64
%
 
160.09
%
 
150.31
 %
 
138.67
 %
 
109.56
%
 
109.56
%
Allowance for credit losses as a % of nonperforming loans
 
176.50
%
 
169.42
%
 
158.30
 %
 
147.38
 %
 
118.01
%
 
118.01
%
Asset Quality (a)
 
 
 
 
 
 
 
 
 
 
 
 
Impaired loans:
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual
$
55,755

$
59,928

$
63,688

$
71,246

$
89,828

$
89,828

Other nonperforming loans:
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual
 
8,876

 
8,275

 
8,951

 
11,460

 
14,859

 
14,859

Total nonperforming loans
 
64,631

 
68,203

 
72,639

 
82,706

 
104,687

 
104,687

Other real estate ("ORE")
 
16,463

 
22,172

 
27,207

 
30,053

 
18,815

 
18,815

Total nonperforming assets ("NPAs")
$
81,094

$
90,375

$
99,846

$
112,759

$
123,502

$
123,502

NPAs as % of period-end loans + ORE
 
1.06
%
 
1.21
%
 
1.38
 %
 
1.61
 %
 
1.78
%
 
1.78
%
Past due 90 days or more & accruing interest
$
8,866

$
6,268

$
10,424

$
5,652

$
22,017

$
22,017

 
 
 
 
 
 
 
 
 
 
 
 
 
(a) Excludes acquired loans and loss share receivable with a period end balance of $1.6 billion, $1.6 billion, $1.7 billion and $2.1 billion, and $2.3 billion and ORE covered by an FDIC loss share with a period end balance of $54.5 million, $61.9 million, $58.5 million, $58.7 million, $54.7 million at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011, and December 2010, respectively, which, as required by current accounting guidance, were recorded at fair value on the date of acquisition.
 
 
 

12
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results


FIRSTMERIT CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
NONINTEREST INCOME AND NONINTEREST EXPENSE DETAIL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
2011
 
2011
 
2011
 
2011
 
2010
QUARTERLY OTHER INCOME DETAIL
 
4th Qtr
 
3rd Qtr
 
2nd Qtr
 
1st Qtr
 
4th Qtr
Trust department income
$
5,413

$
5,607

$
5,863

$
5,514

$
5,627

Service charges on deposits
 
15,622

 
17,838

 
15,712

 
14,910

 
15,938

Credit card fees
 
10,182

 
13,640

 
13,510

 
12,207

 
12,678

ATM and other service fees
 
3,920

 
3,801

 
3,063

 
2,917

 
2,910

Bank owned life insurance income
 
3,381

 
3,182

 
3,015

 
5,241

 
3,192

Investment services and insurance
 
1,844

 
1,965

 
1,972

 
2,447

 
2,300

Investment securities gains, net
 
5,790

 
4,402

 
889

 
—

 
146

Loan sales and servicing income
 
5,875

 
1,036

 
2,609

 
5,012

 
9,221

Other operating income
 
7,710

 
9,301

 
4,858

 
4,508

 
2,299

Total Other Income
$
59,737

$
60,772

$
51,491

$
52,756

$
54,311

 
 
2011
 
2011
 
2011
 
2011
 
2010
QUARTERLY OTHER EXPENSES DETAIL
 
4th Qtr
 
3rd Qtr
 
2nd Qtr
 
1st Qtr
 
4th Qtr
Salaries, wages, pension and employee benefits
$
62,546

$
61,232

$
56,713

$
59,871

$
62,331

Net occupancy expense
 
7,270

 
8,464

 
8,086

 
8,594

 
9,236

Equipment expense
 
7,234

 
7,073

 
6,816

 
6,836

 
7,549

Taxes, other than income taxes
 
1,389

 
1,507

 
922

 
1,960

 
2,021

Stationery, supplies and postage
 
2,719

 
2,517

 
2,750

 
2,705

 
3,183

Bankcard, loan processing and other costs
 
7,948

 
8,449

 
8,266

 
7,562

 
7,810

Advertising
 
2,275

 
2,391

 
2,287

 
2,384

 
3,094

Professional services
 
5,763

 
5,732

 
5,940

 
5,793

 
7,731

Telephone
 
1,525

 
1,570

 
1,462

 
1,486

 
1,579

Amortization of intangibles
 
543

 
543

 
543

 
543

 
1,006

FDIC insurance expense
 
5,119

 
3,240

 
4,581

 
4,366

 
4,342

Other operating expense
 
19,543

 
13,239

 
11,702

 
12,345

 
12,570

Total Other Expenses
$
123,874

$
115,957

$
110,068

$
114,445

$
122,452


13
FirstMerit Corporation Reports Fourth Quarter 2011 EPS Results

FIRSTMERIT CORPORATION AND SUBSIDIARIES
 
 
 
 
 
 
ALLOWANCE FOR LOAN LOSSES NONCOVERED - Net Charge-off Detail
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Quarters ended
 
Year ended
(Dollars in thousands)
 
December 31,
 
December 31,
 
 
2011
 
2010
 
2011
 
2010
Allowance for noncovered loan losses - beginning of period
$
109,187

$
116,528

$
114,690

$
115,092

Loans charged off:
 
 
 
 
 
 
 
 
Commercial
 
7,418

 
13,225

 
31,943

 
39,766

Mortgage
 
1,033

 
962

 
4,819

 
5,156

Installment
 
5,635

 
8,665

 
25,839

 
34,054

Home equity
 
2,491

 
1,158

 
8,691

 
7,912

Credit cards
 
1,711

 
2,497

 
7,846

 
13,577

Leases
 
—

 
204

 
778

 
896

Overdrafts
 
696

 
842

 
2,852

 
3,171

Total
 
18,984

 
27,553

 
82,768

 
104,532

Recoveries:
 
 
 
 
 
 
 
 
Commercial
 
850

 
647

 
2,703

 
1,952

Mortgage
 
29

 
62

 
221

 
263

Installment
 
2,890

 
4,003

 
13,639

 
13,047

Home equity
 
730

 
417

 
1,985

 
1,599

Credit cards
 
475

 
518

 
2,264

 
2,199

Manufactured housing
 
56

 
34

 
119

 
156

Leases
 
2

 
27

 
37

 
267

Overdrafts
 
189

 
191

 
774

 
864

Total
 
5,221

 
5,899

 
21,742

 
20,347

Net charge-offs
 
13,763

 
21,654

 
61,026

 
84,185

Provision for noncovered loan losses
 
12,275

 
19,816

 
54,035

 
83,783

Allowance for noncovered loan losses-end of period
$
107,699

$
114,690

$
107,699

$
114,690

 
 
 
 
 
 
 
 
 
Average loans (a)
$
7,520,400

$
6,868,222

$
7,217,349

$
6,818,962

Ratio to average loans (a):
 
 
 
 
 
 
 
 
(Annualized) net charge-offs
 
0.73
%
 
1.25
%
 
0.85
%
 
1.23
%
Provision for loan losses
 
0.65
%
 
1.14
%
 
0.75
%
 
1.23
%
Loans, period-end (a)
$
7,635,776

$
6,937,142

 
7,635,776

$
6,937,142

 
 
 
 
 
 
 
 
 
Allowance for credit losses (a):
$
114,072

$
123,539

$
114,072

$
123,539

As a multiple of (annualized) net charge-offs
 
2.09

 
1.44

 
1.87

 
1.47

Allowance for noncovered loan losses (a):
 
 
 
 
 
 
 
 
As a percent of period-end noncovered loans
 
1.41
%
 
1.65
%
 
1.41
%
 
1.65
%
As a multiple of (annualized) net noncovered charge-offs
 
1.97

 
1.34

 
1.76

 
1.36

 
 
 
 
 
 
 
 
 
(a) Excludes acquired loans and loss share receivable.


14