FirstMerit Lifted by Fees, 11% Increase in Loans

FirstMerit (FMER) in Akron, Ohio, reported higher first-quarter earnings thanks to better fee income and lending as well as lower expenses.

The $15.3 billion-asset company's profit rose 19.5% from a year earlier, to $36.1 million, or 33 cents per share.

Noninterest income rose 11% from a year earlier, to $57.4 million. Noninterest expense fell 6% year over year, to roughly $107 million. FirstMerit's efficiency ratio improved 3.46 percentage points year over year, to 62.06%.

FirstMerit's loan book grew 11.4% from a year earlier, to $8.8 billion.

However, net interest income fell 6.3% year over year, to $111.3 million, while net interest margin narrowed 32 basis points, to 3.46%.

Chargeoffs fell 38% year over year, to $10.8 million, as credit quality improved.

"Our most recent quarter was highlighted by excellent credit quality, additional cost savings generated by our successful efficiency initiative and robust growth in average non-covered commercial loans and average core deposits," Paul Greig, FirstMerit's chief executive, said in a press release.

The results did not include FirstMerit's purchase of Citizens Republic Bancorp in Flint, Mich., which was completed April 12. FirstMerit agreed to pay $912 million for Citizens Republic in September; the combined company has about $24 billion in assets and roughly 400 branches.