FirstMerit Corp.’s profit for the first quarter jumped 23 percent as loan production and deposits grew.
It was the Akron bank’s 56th consecutive quarter of profitability.
FirstMerit [Nasdaq: FMER] said Tuesday that it earned $37.3 million, or 33 cents a share, in the first quarter of 2013. That’s up from $30.3 million, or 28 cents a share, for the first quarter of 2012.
Paul Greig, chairman, president and CEO, said in a prepared statement that highlights of the results were cost savings due to an “efficiency initiative” and growth in a segment of commercial loans and some deposits.
The “efficiency initiative” includes the closing of eight branches in 2012 and other cost-saving measures.
The results do not include the acquisition of Citizens Republic Bancorp, of Flint, Mich., which was completed April 12.
Average commercial loans in the first quarter increased $716.7 million, or 14 percent, compared with a year ago.
Average core deposits (which do not include “time deposits” such as CDs) in the quarter grew by $680.5 million, or 7 percent, compared with the first quarter 2012.
Greig also noted “excellent credit quality,” referring to a decrease in loan losses.
The bank’s net charge-offs, dealing with items deemed uncollectible, totaled $5.9 million, or 0.27 percent of average loans, in the first quarter 2013, That compares with $12 million, or 0.62 percent of average loans, in the first quarter of 2012.
Noninterest income increased to $57.4 million, a rise of 11 percent from the first quarter last year.
Noninterest expense for the first quarter of this year was $106.9 million, a decrease of $5.3 million, or 5 percent, from the fourth quarter of 2012. Noninterest expense was down $6.8 million, or 6 percent, from the first quarter of 2012.
Shares of FirstMerit closed up 40 cents to $16.28. The stock is up 15.9 percent, including dividends, since Jan. 1. The stock is up 5 percent from a year ago.
FirstMerit doubled its size with its $912 million acquisition of Citizens Republic, adding branches in Wisconsin and Michigan.
The purchase also is FirstMerit’s first since the bank’s push outside Northeast Ohio with acquisitions in the Chicago market in 2010.
The new FirstMerit now has almost $24 billion in assets, 5,000 employees, 415 branches and more than 440 ATM locations.
About 2,000 of the bank’s employees work in the downtown area headquarters operations. That includes workers in the FirstMerit Tower on Main Street; Cascade III, an adjacent building; and an operations center near the Akron Innerbelt.
Akron city officials said last week that the city will invest an estimated $3.2 million to spruce up the aging Cascade Plaza off South Main Street downtown and the parking lot below it — at the request of FirstMerit Corp.
FirstMerit has said it will add up to 150 new full-time jobs in Akron and will lend Akron the money for the improvements to Cascade Plaza.
Additionally, city officials have said the state is scheduled to provide FirstMerit with a $2.1 million Job Creation Tax Credit and a $50,000 Workforce Training Grant.
These incentives are based on FirstMerit’s new jobs adding $11.2 million to its annual payroll and the company’s commitment to remain in Akron for at least 12 years.
The state’s Tax Credit Authority — which must approve the $2.1 million state tax break — has its next meeting April 29. The agenda for this meeting will not be available until Friday.
Katie Byard can be reached at 330-996-3781 or firstname.lastname@example.org.