FirstMerit Corp. on Tuesday reported a 16.3 percent increase in profits for the third quarter as deposits and loan production grew and losses from loans decreased.
The Akron-headquartered banking company said profits were $40.7 million, or 23 cents a share, compared with $35 million, or 32 cents a share, for the third quarter a year ago.
Included in net income for the third quarter of this year were $33.4 million of one-time pre-tax merger costs related to FirstMerit’s purchase of Citizens Republic of Flint, Mich., on April 12.
FirstMerit [Nasdaq: FMER] nearly doubled its size with its $1.3 billion acquisition of the Michigan bank, adding branches in Michigan, Wisconsin and Ohio.
As of last weekend, FirstMerit and Citizens Republic were one bank “operating with unified systems and procedures from the front of the house to the back,” said FirstMerit chairman, president and CEO Paul Greig, in a prepared statement.
With that “last milestone behind us,” Greig said, FirstMerit is “actively working to take market share in all of our markets, grow our business and enhance shareholder value.”
The Citizens Republic branches became FirstMerit branches in June.
FirstMerit has the largest share of deposits among financial institutions operating in the Akron area. It has grown its share of deposits to 26.1 percent as of June 30, according to Federal Deposit Insurance Corp. data. The bank ranked No. 6 for share of deposits in the Cleveland metropolitan area, according to the FDIC.
The third quarter represents the bank’s 58th consecutive quarterly profit.
However, the 23 cents earnings per share for the third quarter was below analysts’ expectations by 11 cents.
Analyst Ratings Network reported that a consensus estimate of analysts forecasts pegged earnings at 34 cents.
Greig said the quarter’s results reflect “solid performance throughout the company.”
Loans — not including Citizens Republic — grew by $444 million, or 3.25 percent, from the prior quarter. The financial item called core deposits grew by $1.1 billion, or 6.91 percent, from the prior quarter. Core deposits do not include “time deposits” such as CDs.
Total assets rose 2.56 percent to $24.1 billion, an increase of $602.9 million, as of Sept. 30. Assets increased $9.5 billion, or 65 percent, compared with Sept. 30 of last year, prior to the merger.
The purchase of Citizens Republic was FirstMerit’s first since the bank’s push outside Northeast Ohio with acquisitions in the Chicago market in 2010.
The new FirstMerit now has 5,000 employees.
About 2,000 of the bank’s employees work in downtown 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.
FirstMerit’s purchase of Citizens Republic includes $355.4 million paid to the federal government — a repayment of funds related to the Michigan bank’s involvement in what was called TARP (the Troubled Asset Relief Program). The program was designed to stabilize financial markets during the Great Recession.
Katie Byard can be reached at 330-996-3781 or firstname.lastname@example.org.